Oral Answers to Questions

DEFENCE

The Secretary of State was asked—

Canberra Bomber

Roger Gale: With what he plans to replace the Canberra Bomber as a wet film camera platform.

Adam Ingram: After the retirement from service of the Canberra PR9 at the end of next month, we will continue to provide military intelligence, surveillance, target acquisition and reconnaissance capabilities through a combination of in-service systems and new equipment programmes such as ASTOR and Watchkeeper, which will incrementally deliver enhanced capability.

Roger Gale: The analysts are all agreed that wet film—traditional film—provides a higher definition and resolution than any other service. What the Minister has described is a platform for providing digital surveillance, which is not good enough. We have known for a long time that Canberra is going out of service at the end of the month. What will provide a platform for the wet film cameras?

Adam Ingram: We propose to invest between £2 billion and £2.5 billion per annum over the next 10 years on our network-enabled capability. That will give us a range of stand-off surveillance systems, which will greatly enhance our capability. The hon. Gentleman says authoritatively that wet film is the only way forward, but that is not the analysis of those who are considering our new requirements for a network-enabled capability, which co-ordinates what is happening in the field and what we see from the sky and provides enhanced communication to people on the ground.

David Taylor: Is there any risk that the successor to the Canberra will not be end-on to the retirement date for Canberra, and that we shall therefore avoid a capability gap of the sort that some analysts have been predicting for some time?

Adam Ingram: We have a range of new systems coming on-stream, one of which is ASTOR, which is the overall capability, while the Raptor reconnaissance pod will be fitted to Tornados and is expected to be ready for operation before the end of this year. That will provide an enhanced capability and is a wet film concept upgraded to digital technology. I hear what my hon. Friend and the hon. Member for North Thanet (Mr. Gale) say, but our proposal is based on what we believe to be the appropriate technology for the decades ahead. It is a major investment based on the best analysis of what we need to meet our requirements in the field.

Henry Bellingham: Will the Minister find time today to pay tribute to the last remaining Canberra PR9 squadron based at RAF Marham? Such squadrons are in many ways the unsung heroes of numerous conflicts over the past 40 years or so, flying in extremely tough conditions in all weathers.

Adam Ingram: I am only too happy to do so. The media has shown some good news footage about all that recently, pointing to the age of some of the crew who have been with that aircraft for a considerable number of years and provided work of incredibly high quality. I am sure that those who fly on the replacement reconnaissance aircraft, combined with the unmanned facility, will provide an equally high standard in the decades to come.

Gerald Howarth: I join my hon. Friend the Member for North-West Norfolk (Mr. Bellingham) in paying tribute to this singular aircraft, its contribution to the Royal Air Force and its capabilities over the past 55 years. No other aeroplane can hold a candle to the service that the Canberra has given. I understand that even Her Majesty the Queen had a small tear in her eye as she saw the last Canberra fly over Buckingham palace.
	I have seen the Canberra in operation in Oman, where I spoke to the crew. As my hon. Friend the Member for North Thanet (Mr. Gale) says, there is no substitute for wet film. Given the Minister's acceptance of the singular capability of the Canberra, its replacement with what he described as a combination of incremental improvements is no substitute for the Canberra. When will Project Dabinett, the Ministry of Defence's study of the long-term replacement for that capability report? Are not our armed forces again being made to carry the operational risk of yet another capability gap because the Ministry of Defence makes it decisions not on military imperatives but to deliver more short-term savings to the Chancellor of the Exchequer, who now struts around the country pretending to be the new friend of the armed forces?

Adam Ingram: I do not know whether the hon. Gentleman wanted to ask a question or to make a political attack. I shall deal with the political attack first. Let us remember that we have seen the largest real-terms increase in defence expenditure for 20 years. That will procure, for land, sea and air, a substantial upgrade of all our equipment needs for decades ahead.
	The hon. Gentleman asked about a specific project. I do not have any information to hand on when a report on it is likely, but I will write to him.
	As for the idea that what we are doing is short-term and represents a cut, I have given the figure for the investment that we shall be making in digital technology. What we are doing is all about improving the capability of our operatives in the field. That is the direction in which our European allies and the United States are going, and it will give us inter-operability with our main allies. I do not see it as a cut; I see it as an enhanced capability.

Iraq

David Ruffley: If he will make a statement on the security situation in Iraq.

Des Browne: Before I answer the question I will, with the permission of the House, take the opportunity on a special day to pay tribute to those who, through their exceptional valour, have earned either the Victoria Cross or the George Cross. My ministerial colleagues, along with members of Her Majesty's loyal Opposition and representatives of the Liberal Democrats, were privileged to be at a commemorative service for the 150th anniversary of the Victoria Cross and the 50th anniversary of the Victoria Cross and George Cross Association in Westminster abbey this morning in the presence of His Royal Highness the Prince of Wales. Those of us who were present at that very simple and dignified service, in the presence of holders of those decorations, were both honoured and humbled to be there.
	While there has been an increase in violence across Iraq in recent months, the majority of attacks remain confined to four out of 18 provinces. Although across three of the provinces in Multi-National Division (South-East) the security situation remains relatively calm, in Basra there has been a recent increase in violence. However, on 19( )June the Prime Minister of Iraq announced a security plan for Basra which has been agreed with the coalition forces. He also announced that the Iraqi security forces would take responsibility for the security of Muthanna province from next month. Both those events were unfolding during my visit last week. As they have very important implications for our troops, I am sure Members will understand why I decided there and then to extend my visit at the expense of my contribution to the defence policy debate in the House on Thursday.

David Ruffley: Nearly a quarter of the British soldiers lost in hostile action in Iraq were in Snatch Land Rovers at the time. Those vehicles are widely recognised to be inadequately armoured to withstand roadside bombs, and are consequently seen as a soft target for insurgents. In the interests of preventing unnecessary deaths, will the Secretary of State tell us which specific vehicles he is considering deploying as replacements for Snatch Land Rovers in Iraq?

Des Browne: The hon. Gentleman has made a good point. The Snatch Land Rover was a popular option earlier in the campaign in Afghanistan, because it was mobile and a good all-rounder, and had the right profile to help our troops to engage with the people of Basra in Multi-National Division (South-East). I think Members will appreciate that a vision of our troops thundering down narrow streets with battle tanks was not exactly what we wanted to convey to the people of Basra and other parts of south-east Iraq.
	Things are changing. As I have said, the level of violence in Basra has increased. I will not go into detail for obvious reasons, but the weapons that the terrorists are using have changed radically, as I have seen for myself on visits. I have seen that that is a serious issue, and have asked for a review. There are medium and long-term plans relating to vehicles, and I shall be considering what we can do to respond to the situation in the short term—although we do also respond by means of tactics and operational instructions.

John Smith: Is my right hon. Friend satisfied that enough is being done to secure the border with Iran, and to prevent Iranian influence in southern Iraq and Basra? I am thinking particularly of the transport of improvised explosive devices which are being used against Snatch vehicles.

Des Browne: I am sure my hon. Friend is aware of the size of the land border between Iraq and Iran. I am sure he is also aware of something that is very clear to me: many of the people living in that area do not necessarily accept in their lifestyles the lines that others have drawn on the maps for them. There are tribes that move freely across the borders and have done so for generations, long before any European country had any interest in that part of the world. It is highly unlikely that any military operation will change that way of life. That having been said, we are very aware of the malign influence that interference by those outside Iraq's borders can have on its politics and destiny. My hon. Friend can rest assured that that is significantly high in our interest and that of the Iraqi Government, and will figure as part of the Basra security plan.

Ann Winterton: The Minister of State said last week in the debate:
	"Our focus at all times is the protection of our personnel".—[ Official Report, 22 June 2006; Vol. 447, c. 1502.]
	Bearing that in mind, what street parameters are regarded as reasonably acceptable—including width and spacing between buildings—for Snatch armoured Land Rovers to patrol in urban areas in Iraq?

Des Browne: I cannot give the hon. Lady a response to a specific question about sizes of streets, and I apologise to her if she thinks that I should be able to do so. I shall look into the issue and if it is of any relevance to the point that I think underlies her question, I will be in touch with her. Decisions on which vehicles to use on operations are for the commanders on the ground. They have to weigh up several points—including the levels of protection, which have been the focus of the debate on the Snatch Land Rover, its mobility, and the ability to reduce the threat through tactics—and they then make a choice. In the view of the general who has responsibility for that area, protection is 30 per cent. about equipment, 60 per cent. about tactics and—because soldiering is a difficult and dangerous operation in those circumstances—the other 10 per cent. is accounted for by other elements.

James Arbuthnot: In Baghdad a couple of weeks ago I was surprised to discover that NATO has a training mission there. What does the Secretary of State envisage as the future of that training mission? Does he envisage that it will take over the whole of the training in Iraq when the multinational security transition command is wound up next year?

Des Browne: I know that the right hon. Gentleman had an important and informative visit to Iraq with his Select Committee. I am not in a position to give him a direct response to that question at this stage, but NATO training is very important to building capacity in the Iraqi security forces. It is certain that beyond the date that he mentions, when the planned multinational training comes to an end, there will continue to be a need for training for the Iraqi security forces, and it is almost certain that NATO countries, if not NATO itself, will make a significant contribution to that.

Nick Harvey: What assessment does the Secretary of State make of the effect that the indefinite detention of 14,000 Iraqi prisoners, under the authority of the multinational forces, is having on perpetuating the insurgency? What measures are in place to charge and try those people under any recognisable judicial procedure and what hope is there that the reconciliation moves being mooted by the new Prime Minister might lead to the release of some of those people soon?

Des Browne: The hon. Gentleman will be aware that, in addition to those who are in the detention principally of the United States, some 30,000 others are in the detention of the Iraqi Government. In all my meetings last week with a significant number of Iraqi Ministers, including the Prime Minister and the President, I discussed the issue of detention. It is an important issue and, in my view, there is no possibility of a sustainable and long-term future for the new Government of Iraq beyond the point of relying on coalition forces if they have large numbers of people in detention and insufficient judicial capacity to deal with them. Consequently, I was pleased that the need to address the significant number of people in detention was a significant part of the reconciliation statement made yesterday by Prime Minister Maliki. However, hon. Members have to understand that many of those people are detained because they are a danger to the Iraqi people. The Government's ability to deal with those detained in the context of reconciliation will be a function of their ability to build a judicial system that can deal with that number of people.

Liam Fox: General Casey, the top American commander in Iraq, said last week:
	"We are quite confident that the Iranians, through their covert special operations forces are providing weapons, I.E.D. technology and training to Shia extremist groups in Iraq."
	Do the Government share that very serious American assessment of Iranian involvement, and what increased risk does it pose to our troops?

Des Browne: I have said, and my predecessor said, that from the nature of some of those weapons, and the coincidence in the description of them and the weapons in the hands of those who have been associated with Iran in the delivery of violence through terrorist activity in other parts of the world, some of them are believed to have their roots in Iran. Whether they are being brought into Iran on the instructions and direction of the Iranian Government or by other elements is not yet clear. However, those sophisticated weapons pose a considerable threat to our forces.

Liam Fox: Clearly, there is an increased risk. Lord Drayson told the other place recently that in Iraq, the Snatch Land Rover
	"provides the mobility and level of protection that we need."—[ Official Report, House of Lords, 12 June 2006; Vol. 12, c. 2.]
	Fusilier Gordon Gentle was killed by a road-side bomb way back in June 2004, and since then other soldiers have been killed who would have survived if they had been in properly armed vehicles.
	Snatch Land Rovers do not offer the level of protection that our troops need in Iraq, yet we continue to use them. Why are our troops not given the level of protection that they need, and which American troops already enjoy? Commanders cannot deploy vehicles that they do not have.

Des Browne: As I have already said to the House, it is open to commanders to deploy vehicles that have heavier protection than the Snatch Land Rover and they have to make— [Interruption.] Other vehicles are available to them; there is a choice. However, commanders must be free to make decisions in relation to the operations for which they deploy soldiers. I have already said to the House that I am aware of the issue: I could not but be aware of it following my visit last week and, indeed, my earlier visit. I have asked for a review of what we can do in the long term and immediately. I shall see what we can do immediately to respond to the changing situation, although significant measures other than those in relation to the vehicle's armour must be taken. We are at the leading edge of some of them, and electronic counter-measures, in particular.

Veterans Challenge Fund

Eric Joyce: What projects the veterans challenge fund has supported in the last 12 months.

Tom Watson: The veterans challenge fund allows communities to celebrate the role veterans play in our society by financing projects that support the three pillars of the veterans strategy. They are: to provide excellent preparation for the transition of service personnel back to civilian life; to provide advice and support for those of our veterans who need it; and to ensure that the nation recognises, understands and commemorates veterans' contribution to society.
	In the past 12 months the fund has supported 23 projects, ranging from work with rough-sleeping veterans to support for the ongoing Victoria Cross and George Cross anniversary celebrations.

Eric Joyce: I thank my hon. Friend for that answer. A number of my constituents have contacted me with a view to setting up a local advice facility for veterans. Will he agree to meet them along with me at some point?

Tom Watson: I should be delighted to meet them. That sounds exactly the sort of initiative for which the veterans challenge fund was created.

Iraq

Harry Cohen: When he expects UK forces to leave Basra.

Des Browne: The requirement for a continuing coalition presence in Basra will persist until clearly defined conditions are achieved. As with all 18 Iraqi provinces, it is the achievement of those conditions that will ultimately determine when Iraqi security forces can take over responsibility for security.

Harry Cohen: Is not the purpose of UK forces in Basra to maintain order and to ensure basic amenities? If so, why did a state of emergency have to be declared after a surge of killings, and why is Bill Neely, ITN's international editor, reporting on limbs amputated for lack of basic medical supplies, children dying from preventable diseases, and no treatment for cancer patients for three years in Basra's main hospital? Why are Ministers sleep-walking when they should be waking up to their responsibilities? If they say, "Can't do", should not it be a case of "Can't stay"?

Des Browne: My hon. Friend's position on the presence of British forces in Iraq is well known, as it has been over the years. The fact is that British forces in Basra have seen an improvement in a significant number of the services available to the people of Basra. There has been an increase in violence over the last few months, but that is entirely coincidental with the period between the election and the formation of the Iraqi Government. The Iraqi Government are now in place and the Prime Minister, the new Defence Minister and the new Minister of the Interior have publicly stated that security in Basra is a priority. They have developed a plan that will be led by the Iraqi security forces themselves, in the form of the Iraqi army. There are significant difficulties; the Iraqi police have been significantly infiltrated by violent groups who are part of an outside process and there is a degree of corruption, but the plan addresses those issues. To suggest that the situation for the ordinary people of Basra is no better since British forces have been there is not true—it has improved for them.

Julian Brazier: Whatever the time scale for our armed forces in Basra, the Secretary of State's earlier comments on possible replacements for the Snatch Land Rover in Basra and elsewhere in Iraq are welcome, provided they lead to early action. I urge the right hon. Gentleman to consider the grievous gap in our capability for clearing mines for light forces, which in practice means most of our forces in Iraq, and indeed in Afghanistan. Both those factors are putting lives at risk unnecessarily.

Des Browne: I thank the hon. Gentleman for his opening comments. I have already made my position clear to the House, so it is unnecessary to repeat it. I shall take into account the hon. Gentleman's second point, although I am not aware of a level of risk immediately generated by the absence of capability that he suggests.

Linda Gilroy: When the members of the Select Committee on Defence were in Iraq recently we met members of the 10th Division and General Latif. As well as giving the Iraqis support in training, did my right hon. Friend hold discussions with the Iraqi Government about how they can be resourced in terms of equipment and other things they need to do the job that they are eager and willing to take over in neighbouring states, as well as playing their part in bringing security to Basra?

Des Browne: I, too, met General Latif and visited the 10th Division. At that stage, he was proudly showing off to me the equipment allocated to him. The indications were that if there had been a blockage in relation to the necessary equipment, the equipment was now forthcoming. The 10th Division was deploying forces in Basra city when I was there, giving security in the city a clear Iraqi face, which was welcome both to our troops and to the people of the city.

Veterans' Day

Ben Chapman: If he will make a statement on Veterans' day.

Tom Watson: I am pleased that the first-ever national Veterans' day is taking place on 27 June. Not only will a major event be organised at the Imperial War museum in London, but we know of 150 events that are being organised locally across the UK. More than 70 events have received financial support from the Department at a total cost of about £130,000. I am delighted that this opportunity to celebrate the achievements of our veterans is being embraced so enthusiastically by organisers, veterans and the general public.

Ben Chapman: While many congratulations are due on the introduction of Veterans' day and all that has been achieved, may we turn our attention to how we recognise those involved in more recent conflicts, such as the Falklands, now approaching its 25th anniversary? But a more pressing point—at least for me—is the situation of those interned by the Japanese during hostilities in the second world war. Can my hon. Friend update me on how we are settling that debt of honour?

Tom Watson: I shall answer both parts of that supplementary question. I can confirm that there will be a major celebration of the 25th anniversary of the Falklands. I probably speak for both sides of the House when I give the reason why. Today, many of us were in the company of the most remarkably brave people, who have served their country in military and civilian capacities. Some of them served in the Falklands and they deserve a commemoration 25 years on. My view is that the anniversary should be celebrated in the UK and the Falklands. I am not in a position to sketch out the detail yet, but I will report to the House when we have more information.
	On my hon. Friend's second point, I am pleased to say that the criteria for the new 20-year residence criterion for the far east prisoner of war scheme have been agreed with my hon. Friend the Member for Hendon (Mr. Dismore) and the chairman of the Association of British Civilian Internees Far East Region. They will be implemented with effect from today. I hope to place the detailed rules in the Library of the House. Those who were British at the time of their internment who think that they meet the criterion of 20 years residence in the UK between 1945 and 7 November 2000, whether they were civilians or members of the armed forces of the British empire, should apply to the Veterans Agency. We expect the first payments to be made very shortly.

Patrick Cormack: The Minister's answers to both those questions will be warmly welcomed throughout the House and the country, but would it not focus attention on what we owe to the veterans, and also enable young people to be taught just what is involved, if we had the commemoration as a public holiday?

Tom Watson: The granting of a public holiday is not in my gift, but the hon. Gentleman's point about young people, for whom the Falklands war is something that they learn about in history, is well made and I hope that, as part of our commemorations of 25 years, we can involve school and youth groups up and down the country.

Ann Coffey: The Stockport British Legion was presented with a cup for its outstanding fundraising last year. This year, it will surpass even last year's effort. Will my hon. Friend join me in congratulating the British Legion, the Normandy Veterans Association and the Combined Services Association in Stockport on the valuable work that they do in helping veterans? His announcement on extending the veterans medal has been warmly welcomed.

Tom Watson: The whole House will wish to congratulate Stockport British Legion. My hon. Friend failed to invite me up to visit the British Legion personally, but if she were to do so, perhaps I could do that during the summer recess.

Mark Harper: I welcome the Minister's announcement about the far east prisoners of war. I know that that has taken a good deal of time, and I hope that that will deal with the rest of the outstanding cases. As for the suggestion from my hon. Friend the Member for South Staffordshire (Sir Patrick Cormack) about a veterans day, it may not be within the Minister's power to grant a day's holiday, but since there has been some criticism this year of the extent to which the Chancellor has tried to involve himself with veterans day and since he appears to be all-powerful in the Government, perhaps the Minister could have a word with him to see whether he could grant such a day.
	Turning to next year's celebrations, veterans day in 2007, which will be coterminous with the 25th anniversary of the Falklands conflict, will be particularly poignant. I urge the Minister to assert the primacy of the Ministry of Defence on that issue and to work closely with Opposition Front-Bench Members to make sure that we have a day that will truly be worthy of our veterans.

Tom Watson: Let me give the hon. Gentleman a commitment that we can do that. The whole House needs ownership of that commemoration. I hope that his input and that of his colleagues will be paramount. As for the Chancellor granting a bank holiday, I am not sure whether that is in his gift either, although, of course, he is all-powerful.

Afghanistan

Andrew MacKay: What the mission statement is for United Kingdom troops in Afghanistan.

Des Browne: UK forces in Afghanistan are primarily deployed as part of the international security assistance force. The ISAF mission, as published, is to help the Afghan Government to create a secure environment in which their authority can be extended across the entire country and reconstruction of the country can be taken forward. Of course, that objective will not be achieved by military means alone, and consequently the British Government have undertaken an unprecedented degree of cross-governmental co-ordination to ensure that we deliver a fully integrated package that addresses governance, security, economic development and political and social change.

Andrew MacKay: I am sure that the Secretary of State will agree that that objective will also not be secured with only 6,000 NATO troops in the southern part of Afghanistan. Is it not essential that more troops are made available, and what is he doing to ensure that that happens?

Des Browne: The right hon. Gentleman will be aware that no one is yet at full operational capability in southern Afghanistan. We are in southern Afghanistan with several international partners—Canada, the United States, the Netherlands, Estonia, Denmark, Romania and Australia—and for our part, in Helmand province, we believe that we have deployed an important and appropriate force. I do not necessarily accept that there are insufficient forces in any other part of southern Afghanistan. However, the issue will need to be kept constantly under review by ISAF and NATO. It will be incumbent on us to ensure that we deploy sufficient forces to enable us to carry out the task in hand. However, the right hon. Gentleman should not forget that the Afghan army itself is increasingly deploying forces to that area. The assessment of those soldiers that I am given is that they are of the highest calibre.

James Gray: I know that the Secretary of State will agree that central to a successful deployment in Afghanistan will be the heavy-lift capability provided by the Hercules aircraft from RAF Lyneham, which is in my constituency. In that context, he will know that one of the contributory factors to the tragic crash of a Hercules in Iraq last year might have been the absence of foam flame retardant in the wing tanks. Will he tell us how quickly the retardant will be fitted in the Hercules fleet and how many planes will be fitted with it? Will he confirm that all the planes that are deployed in Afghanistan will have that safeguard fitted to them?

Des Browne: I am happy to accept the hon. Gentleman's invitation to pay tribute to the contribution that the Hercules—and, more importantly, those who fly the Hercules—have made to military operations in not only Afghanistan and Iraq at present, but elsewhere. He knows, as I am sure that the House does, that we intend to fit the flame-retardant foam into Hercules and to ensure that those that are deployed to the theatre are fitted with that. I have said in public, so I have no reason to say anything different from the Dispatch Box, that we hope to be able to do that by August for the first of them. We will ensure that sufficient numbers of Hercules are fitted with the appropriate retardant foam so that operations can be conducted.

Royal Marine Corps

Michael Fabricant: What assessment he has made of the likely future structure of the Royal Marine Corps within the UK's defensive capability; and if he will make a statement.

Adam Ingram: The Royal Marines make a unique and essential contribution to our armed forces and have done so for more than three centuries. We remain firmly committed to maintaining a world-class Royal Marine force and amphibious capability.

Michael Fabricant: I am grateful to the Minister for that answer. I think that hon. Members on both sides of the House will recognise and applaud the work of the Royal Marines, especially in the deployment to Afghanistan that will take place shortly. What thoughts do the Minister and the Department have about the formation of a future additional fourth commando of the Royal Marines? Has he thought about the formation of a new special operations group with commandos from the Royal Marines, the Parachute Regiment and others who have done the commando course at Lympstone?

Adam Ingram: On the latter point, the hon. Gentleman might be aware that a special support regiment has been stood up and is based at St. Athan. The question of the fourth manoeuvre unit of the Commando Brigade is being examined, although no recommendations have reached Ministers' desks yet. I will wait and see what the recommendations are before giving the hon. Gentleman an answer to his specific question because I will have to see the merits, benefits and, perhaps, disbenefits of the proposal before reaching a considered opinion. Work is in hand to achieve that, however.

Michael Weir: The Minister will know that there has been a lot of speculation in Scottish newspapers recently about the possible deployment of 45 Commando, which is based in my constituency, to Afghanistan. Those troops have special expertise—they are technology experts—in winter warfare. Given the Secretary of State's earlier answer, will the Minister assure us that any such deployment would keep UK troops within the agreed ISAF parameters and would not represent an extension to the UK's involvement in Afghanistan?

Adam Ingram: No decision has been taken as to the next deployment, but 45 Commando clearly has particular capabilities and is trained for specific purposes, and that comes into play as part of the planning process, in both the medium and long term. However, I do not know whether the hon. Gentleman is arguing for it not to be deployed or he is in favour of it being deployed. I do not know where his party currently stands on that because we are talking about a NATO mission, and his party is of course opposed to NATO. Therefore, I am unsure where he is coming from on this issue. I meet 45 Commando personnel regularly and I can say that, in common with all other members of Her Majesty's armed forces, they actually like being deployed. We have to make proper judgments accordingly as to when and how often that deployment takes place.

Dr. David Kelly

Norman Baker: If he will make a statement on the role played in his Department by Dr. David Kelly.

Des Browne: Dr Kelly's role in the Department, on secondment from the Defence Science and Technology Laboratory, Porton Down, was as an adviser to the Ministry of Defence and the Foreign and Commonwealth Office on Iraq's chemical and biological weapons capabilities, the work of the United Nations Commissions dealing with inspections in Iraq, and on issues relating to the chemical weapons convention and the biological and toxin weapons convention. Dr. Kelly also advised the UN Monitoring, Verification and Inspection Commission on training, and communicated Iraq issues to the media and institutions. All that was set out in the Hutton report.

Norman Baker: Dr. Kelly made an immense contribution to the security of this country and the world. As part of his work for the Department, shortly before his death he co-authored a report for the United States and the UK that was delivered to the US on 27 May 2003, and which made it clear that the so-called mobile biological weapons laboratories were nothing of the sort. However, two days later President Bush indicated,
	"we have found the weapons of mass destruction",
	which Dr. Kelly flatly contradicted in public afterwards. What discussions took place between the UK and the US regarding Dr. Kelly's public statement about that matter, and what investigations have been conducted to establish where the fake trailers masquerading as mobile laboratories came from? If the Secretary of State cannot answer now, will he please write to me?

Des Browne: I do not think that the hon. Gentleman will be surprised that I approach the Dispatch Box to confirm that I am unable to answer a question of such a nature without having had some prior notice of it. However, what I will say is that it is my understanding that although the hon. Gentleman has publicly said, in terms, that he is about to devote one year of his life to pursuing investigations in relation to Dr. Kelly and the circumstances surrounding his death, it is not my intention, periodically or consistently, to start an investigation from the Dispatch Box. The position is that Lord Hutton investigated fully the circumstances surrounding the death of Dr. Kelly and it would be entirely inappropriate for me to start picking up aspects of that case piecemeal. However, I will look carefully into the question he has asked to see if I can provide any information, despite the fact that my Department was entirely open in respect of Dr. Kelly's role and all the evidence that it had for the Hutton report. If, contrary to my view, there is anything of assistance that I can communicate to the hon. Gentleman, I will do so.

Army Recruitment

Philip Dunne: What recent trends he has identified in levels of recruitment to the Army.

Adam Ingram: A combination of high employment, a prosperous and strong economy, attractive alternatives in further education and stiff competition from other employers have all increased the pressure on the Army in its efforts to attract young men and women. To counter this, the Army's recruiting group has redoubled its recruiting effort through advertising campaigns. During recent months, its intensive marketing campaign has paid dividends and the number of applications has increased. The challenge now is to convert that interest into enlistments.

Philip Dunne: With unprecedented numbers of Territorial Army soldiers and other reservists currently serving in Iraq and Afghanistan, and yet with TA strength at its lowest level since its formation more than 100 years ago, what do the Government plan to do to fix the recruitment crisis now affecting all our reserve forces?

Adam Ingram: As of 14 June 2006, some 574 members of the Territorial Army—about 1.8 per cent. of the TA—were deployed on operations overall, of whom 397 are serving in Iraq. Extensive efforts are being made to achieve better recruiting. As at April 2006, the TA's strength was more than 2 per cent. higher than it was one year ago, and it is at its highest level since June 2004. Its strength has increased by about 900 since the beginning of the year, which could indicate a trend. However, in respect of the TA, the reserves and the regular forces, constant effort needs to be made to keep the marketing intensity high, because that is what the competition is doing to attract young men and women into their areas of interest. We are beginning to see some trends that are to our benefit, but we can maintain them only through such intensive effort.

Lindsay Hoyle: I know that my right hon. Friend is well aware that Lancashire and the entire north-west is a very fertile recruitment area for the armed forces. However, has the time not come to ensure that, in addition to good recruitment, we enjoy good retention in the north-west by moving Army bases from the south to the north, which is where the families live? That is much overdue and much needed, and the time has come to recognise the needs of our troops.

Adam Ingram: It is about recognising the need of the armed forces overall—in this case, the Army. Part of the basing reason is to be close to training areas, and that is why we still have extensive basing in Germany and in the south—to be close to those training areas—but my hon. Friend raises a good point, which he should follow with interest in the months and years ahead. Super-garrisons are being considered as part of the future Army structure, but it is too early to say where the lay-down of such garrisons will be—whether in Northern Ireland, Scotland, the north-east, the north-west, the midlands or the south. However, all that work is under way. Moving troops involves spending an extensive amount of money on infrastructure and has to be planned for. That will not happen overnight, but work is under way to achieve some of those objectives.

Nicholas Winterton: I am very pleased indeed to follow the hon. Member for Chorley (Mr. Hoyle) in emphasising the importance of the north-west to Army recruitment. Will the Minister accept that the TA makes an increasingly important contribution to our armed forces, and certainly in respect of recruitment? He recently admitted to me that there has been a problem with the payment of the bounty to TA soldiers in the north-west, in that soldiers who deserve the bounty have not been awarded it. Will he ensure that that matter is corrected at a very early date?

Adam Ingram: I agree with the first part of the hon. Gentleman's comments: the TA plays a substantial part in all that we do, and not just in Iraq and Afghanistan, but elsewhere. In many ways, that is perhaps why we are beginning to see, once again, an increase in recruitment. In fact, we are getting indications that people want to join the TA because deployment is becoming a feature of the role, whereas before, that was not necessarily the case. The rebalancing of the TA is about restructuring it to make it more usable and better focused on the regular service, so we have attended to some of those issues. I do not recollect saying to the hon. Gentleman what he said that I said about the bounty, although I might have done so in a written answer, of which I write hundreds in a given period. I do not think that I have given that answer, but I will check whether I have, and if there is an issue to be addressed, it will be.

Liam Fox: Recent figures that I have before me show that only one infantry battalion in the whole Army is now at full strength; on average, each battalion is one third below combat strength. Can the Minister confirm that the infantry battalion soldier manning deficit is about 3,000, and that the Government's own prediction is that that will worsen while we are deploying more troops abroad? If that is not overstretch, just how would he describe it?

Adam Ingram: I do not accept that overall analysis from the hon. Gentleman. I have given an indication of the trends and we are beginning to see some benefit from our intensive marketing campaign. I do not deny that we are under-strength, that we find it hard to hit our targets, or that we are under-target, but I should point out that, historically, that has always been the case. What we have tried to do through the new future infantry structure and future Army structure is to get the balance right—to set realistic targets and then to try to achieve them.
	In my reply to the hon. Member for Newark (Patrick Mercer), I said that the recruiting environment is difficult. The economy is very strong and we face a lot of competition from elsewhere in the marketplace, so to speak, which is why we are now investing so heavily in the marketing campaign. We can measure the impact in two ways: one of our marketing strategies led to 15,000 expressions of interest, and the Everest west ridge campaign led to an additional 15,000 expressions of interest. What we have to do now is turn those expressions of interest into actual enlistment. That is the next objective.

Iraq

Patrick Mercer: If he will make a statement on recent ground operations in Iraq.

Des Browne: Coalition operations across Iraq continue to uphold security, to develop robust, self-reliant and capable Iraqi security forces, and to promote effective governance, economic growth and reconstruction. Increasingly, Iraqi security forces are taking the lead in such operations.

Patrick Mercer: The Secretary of State will be aware that 20 Armoured Brigade was recently deployed for ground-holding operations in Iraq, expecting to be there for slightly more than six months. No sooner had its personnel arrived than that tour was extended to seven and a half months. I do not doubt that the soldiers and airmen of the brigade will take that on the chin, but the decision has come as a hammer blow to their families, wives and children, many of whom are isolated in Germany. I am sure that the right hon. Gentleman agrees with me that no Ministry of Defence that knows its business could have allowed such a nonsense to occur. Will he tell the House how he will stop that piece of routine planning being made a complete nonsense of again?

Des Browne: I recognise that the hon. Gentleman has significant knowledge of these matters, but I do not accept that such decisions are an indication of the Department or the military not knowing what they are doing. On occasion, as he is aware, there is a need to review decisions and to change them. I have met many soldiers on both of my visits to Iraq and I know that they will do the job that they are asked to do, but I accept entirely that we must keep their families constantly in mind. The families face as much pressure in the absence of their family members in theatre as do the members in theatre doing what they are trained to do as British soldiers. I undertake to ensure, as far as it is within my power to do so, that in future planning is conducted in a way that gives families the maximum possible degree of certainty, subject of course to the fact that circumstances may cause us to review decisions that have been made.

Mark Pritchard: Earlier the Secretary of State said that there would be an immediate review of the types of vehicles used by our armed forces in Iraq. When is that review likely to report to the House? Does he agree that, although winning hearts and minds is important, keeping our troops on the ground safe is even more important? Is it not time that we moved them out of Land Rovers, reduced foot patrols and got our troops into Warrior armoured vehicles?

Des Browne: We have already agreed to supplement Snatch with a new patrol vehicle, Vector, which will come into service in 2007. We are currently upgrading the protection on the FV430 to allow it to be used more widely, and we have already upgraded the protection on the Warrior, the Saxon and the CVR(T). Such issues are being considered day-to-day, on an ongoing basis, and the steps that can be taken are being taken. As a consequence of my own observations and information that has been brought to my intention, I asked for a review of the matter. That review is ongoing, but I am not able to give the hon. Gentleman a specific date for its completion. I accept that the protection of our armed forces is my most important priority as Secretary of State for Defence.

Cadet Forces

Madeleine Moon: What recent steps his Department has taken to support the cadet forces.

Tom Watson: The cadet forces organisation offers a vast range of personal development and educational opportunities for young people, allowing them to increase their self-esteem, build their confidence and ultimately realise their full potential. It is widely recognised that in addition to this, they act as a force for good in their communities.
	The MOD invests £95 million a year in the development of the cadet forces and furthermore the armed forces support the cadet forces with a significant benefit in kind in the form of training facilities, material and manpower resources.

Madeleine Moon: I thank the Minister for that response. I am fortunate in my constituency in having active sea, air and Army cadet forces. So much so, that this weekend the 5 Cadet Battalion of the Royal Welch was presented with a new banner by Colonel David Cox on behalf of past members.
	Back in April, I was pleased to be present when 2117 Squadron of Kenfig Hill air training corps was presented with state-of-the-art communication equipment by Selex Systems. Will the Minister join me in thanking those armament businesses that support cadet forces by giving them equipment and by allowing them to experience the latest equipment and the latest technologies? Also, will—

Mr. Speaker: Order. Will the hon. Lady resume her seat? I used to be a corporal in the cadets and I am enjoying what the hon. Lady is saying, but we must get on with the questions. I think that the Minister will be able to reply.

Tom Watson: I will be brief, corporal.  [Interruption.] Sorry. I meant no disrespect, Mr. Speaker.
	My hon. Friend the Member for Bridgend (Mrs. Moon) is right to congratulate local businesses that build partnerships with local cadet forces. The situation that she describes is one that we would hope could be replicated throughout the country. Such gifts help broaden even further the range of opportunities and experience that is open to our young people.

Andrew Murrison: The Minister will be aware of the importance of cadet forces in personal development for young people, but they are important also in terms of recruitment to the armed forces. What assessment has the hon. Gentleman made of the poor state of repair of many of the premises occupied by cadet forces? What will he do to improve matters?

Hon. Members: Private Watson!

Tom Watson: This chastened Private Watson will take away the hon. Gentleman's suggestion and consider it. There is not a deep pot of money for our cadet forces, but they do remarkable things with small pots of money. Wherever we can help them, we do so.

Iraq

Stephen Hammond: What recent assessment he has made of the security situation in Iraq.

Des Browne: I refer the hon. Gentleman to the answer I gave earlier today to the hon. Member for Bury St. Edmunds (Mr. Ruffley).

Stephen Hammond: I listened carefully to the answers given by the Secretary of State. In response to one of the earlier questions, he said that there is a threat posed to the security situation in Iraq and to our forces by infiltrators in the security services and the police force. Could he confirm whether he has spoken to the new Iraqi Defence Minister about this? What steps will the UK take in conjunction with the new Iraqi Government to eradicate infiltrators?

Des Browne: The hon. Gentleman is correct that I identified that threat, which I do not think will be news to anyone in this place. I think that it was well known that the Iraqi police service had been infiltrated by militia and other organisations.
	As part of the Basra security plan, and particularly for the Multi-National Division (South-East), although I am sure that the arrangement will need to be run in other parts of Iraq, the Army is being deployed to create the opportunity to arrest from the police force those officers who are corrupt or those officers who are involved in violent gangs and use their position in the police to perpetrate violence.
	The hon. Gentleman asks me whether I have spoken to the new Iraqi Defence Minister about these matters. I have not only spoken to the Defence Minister, but also to the new Iraqi Minister of the Interior and with the Prime Minister. He can be reassured that all of them explicitly recognise that this is a problem and that something needs to be done about it. We have, with the Iraqi security forces in Basra, been doing something about it over the past week or thereabouts, and have arrested individuals.

Veterans

Kevan Jones: If he will make a statement on Government support for veterans.

Tom Watson: The Government provide a comprehensive programme of recognition and support for veterans. This includes an excellent resettlement package for service personnel returning to civilian life; high-quality pension and compensation schemes; measures to meet veterans' health and welfare needs; and initiatives such as Veterans' day and the veterans badge, recognising veterans and the debt of honour that we owe them.

Kevan Jones: I thank my hon. Friend for his reply. I attended an excellent Veterans' day in my constituency on Saturday with more than 50 veterans, who welcomed the badge that the Minister has announced. However, one group of individuals in my constituency, which is a former mining community, have been left out—the Bevan boys, who contributed to the war effort and deserve the recognition that other veterans have received. Will my hon. Friend look at the issue to see whether those brave people, many of whom lost their lives in the mines, can receive recognition?

Tom Watson: There is great merit in my hon. Friend's suggestion. Other hon. Members, including my hon. Friend the Member for Ochil and South Perthshire (Gordon Banks), have raised the matter in the House, and I agree to ask my officials to look at extending the scheme.

Colchester Garrison

Bob Russell: Whether provision has been made under the private finance initiative contract for the new Colchester garrison to house all members of Her Majesty's armed forces who require accommodation in Colchester.

Adam Ingram: The accommodation that is being provided under the Colchester PFI is sufficient to meet all current endorsed requirements for Her Majesty's armed forces personnel who are permanently based at the garrison. Those requirements are, of course, kept under review.

Bob Russell: I am grateful for that answer, which is on the record. I shall watch the Ministry of Defence—I hope that the Minister will confirm that he, too, will do so—to make sure that it does not seek to rent houses from the private sector to accommodate soldiers whom they cannot accommodate within the garrison.

Adam Ingram: Usually, the hon. Gentleman gives credit to the PFI. Stage 1 will provide 1,145 bed spaces out of a total of 2,231. The scheme is ahead of schedule, and delivery will probably be complete in September this year—three months early—so significant progress has been made. As for his specific question, 56 single personnel are currently living in substitute single living accommodation—SSLA—and it is anticipated that there will be no new requirement for SSLA after phase 1 is completed.

Orders of the Day

Charities Bill

[Relevant documents: The Report of the Joint Committee on the Draft Charities Bill of Session 2003-04, HC 660, and the Government's response thereto, Cm 6440.]
	 Order for Second Reading read.

Hilary Armstrong: I beg to move, That the Bill be now read a Second time.
	The Bill is part of a renewed drive by the Government to break down the barriers that face the charitable sector. Charities and voluntary organisations play a fundamental role in the fabric of our society, and provide a vital service to individuals and communities. By creating the office of the third sector and introducing the Bill, we have underlined our commitment to the growing importance of charitable endeavour in our society by helping to release charities' potential for further public good. There are about 190,000 charities on the public register in England and Wales, with a combined annual income of over £39 billion.
	The sector has significant social and economic weight, but as society evolves, so our charities must be given the freedom to meet the challenges of the modern world. The Bill will enable them to keep pace with the modern social landscape while ensuring that they are accountable to the public whom they serve. One of the most important ways in which the Government can support and enable the charitable sector to develop is to create a framework within which charitable endeavour can thrive.
	We have three clear aims for the Bill. First, we wish to provide a legal and regulatory environment that enables all charities, however they work, to realise their potential. Secondly, we wish to encourage a vibrant and diverse sector, independent of Government, and thirdly, we wish to sustain high levels of public confidence in charities through effective regulation.

Andrew Selous: Will the right hon. Lady give way?

Hilary Armstrong: It is a bit early, but yes. I have not got into my speech yet.

Andrew Selous: The right hon. Lady is very gracious. I apologise for intervening a little early on. Will she assure the House that nothing in the Bill will remove the presumption that religion is a public benefit?

Hilary Armstrong: The hon. Gentleman might like to wait to hear what I say about that, but I am confident that religion certainly has a charitable purpose and that religious organisations will be able to demonstrate effectively that they are of public benefit. That is the key point of the Bill. Both criteria have to be met. Any organisation that is charitable and produces public benefit is allowed considerable tax concessions, which is public money, because otherwise they would be paying that. However, as I say, I am confident that any religion that I have come across would be able to meet both criteria.
	The Bill will make improvements—

Bob Spink: Will the right hon. Lady also reassure universities and the higher education sector that research and knowledge transfer will remain charitable activities in the public benefit?

Hilary Armstrong: I have learned already that there are incredible legal issues here, and I do not want to say anything that will lead me into giving lawyers any more money than they are already entitled to. The hon. Gentleman has wound two questions into his one intervention. One concerns the status of universities, to which I will come later. If, say, they are part of a research programme that a medical charity is undertaking, again they will have to meet the public benefit test, but I am confident that they would do so. As I say, I will come to the particular status of universities later.
	The Bill will make improvements in several—

David Taylor: Bracketed with my right hon. Friend's very popular assertion that she does not want the legal profession to have any more money than it already receives, I am sure that it would be equally popular if she were to incorporate private schools in that. Is she minded to accept an amendment from a group of us that would prevent organisations that charge unduly restrictive fees from being granted charitable status? That is just as worthy an aim in this admirable Bill.

Hilary Armstrong: Again, I shall deal with that specifically later in my speech, so I should be extremely grateful if my hon. Friend would hang on until then, when he may wish to intervene again.
	The Bill will make improvements—

John Bercow: Will the right hon. Lady give way?

Hilary Armstrong: I am anxious to get into the meat of my speech, but I will take this further intervention.

John Bercow: I am extremely grateful to the right hon. Lady, who has certainly been very generous at an early stage of her remarks, but I am trying to follow what I think is the chronological sequence of the Bill, and I think that my question is apposite. Are the order-making powers under proposed new clause 3A to the Charities Act 1993, referring to registration of charities, subject to the negative procedure of the House or to its affirmative counterpart; and whichever it is, may we have a draft of the regulations before the Bill's passage?

Hilary Armstrong: Again, I shall deal with that later in my speech. The hon. Gentleman says that he wants to deal with the Bill in sequence, but I have not yet begun to deal with the Bill—I was still in my preamble.
	The Bill will make improvements in several areas of the law and in the regulation of charities. The most important improvements concern the definition of "charity", the constitution, functions and powers of the Charity Commission as regulator and in its relationship with the Government, the creation of a new corporate legal form for charities, which will be called the charitable incorporated organisation, changes to ensure that effective and proportionate regulation applies right across the charitable sector, including those charities which are not currently required to register with the Charity Commission, and the regulation of people who collect in public for charity. I shall deal with each of those specific areas in more detail.
	The Bill is the result of a thorough process, including extensive consultation with charities themselves and significant time spent in the other place. I know that many hon. Members are active trustees, volunteers and, indeed, supporters of charities, and they are well aware of the strong support for the Bill across the breadth of the charitable sector.
	The Bill originated in a review by the Prime Minister's strategy unit, which was published in 2002, of charities and the wider not-for-profit sector. We received more than 1,000 responses to the public consultation on that review, and those responses showed clear and strong support for the great majority of the review's recommendations, which form the main content of the Bill.
	The Bill was published in draft in May 2004, and it received thorough pre-legislative scrutiny by a Joint Committee, which was skilfully chaired by my right hon. Friend the Member for Darlington (Mr. Milburn), who is in his place today. The Government accepted more than three quarters of the Joint Committee's recommendations, and the Bill emerged the better for it.
	The Bill was first introduced in December 2004 in another place, where it was extensively debated, and it fell when Parliament was dissolved in April last year for the general election. It was reintroduced at the first opportunity in this Parliament, and it has had more than 60 hours of debate so far.
	It has been well over a decade since any significant changes have been made to charity law, and many of the aspects of the current law are considerably older than that. Charity law has simply not kept pace with changes in our society and in the diverse voluntary sector.
	The Bill extends to England and Wales, but not to Scotland or Northern Ireland, where charity law is a devolved matter. Even before devolution, there were three different systems of charity regulation in the UK—one for England and Wales, one for Scotland and one for Northern Ireland. In July 2005, the Scottish Parliament passed an Act including many of the reforms that our Charities Bill will make for England and Wales, and similar proposals are being worked up in Northern Ireland. After all those reforms have been enacted, the three systems will continue to be compatible without being identical.
	The Charities Bill contains 78 clauses and 10 schedules, and it is divided into four parts. Part 1 of the Bill contains the provisions defining "a charity", which are very important. Any organisation which falls within the definition gains access not only to valuable tax exemptions, but to a special status, which enjoys a high degree of popular trust and confidence.

Richard Burden: I welcome the Bill, which contains many useful provisions. Will my right hon. Friend comment on one issue concerning definitions? She may be aware that one of the purposes which falls within the definition is the advancement of amateur sport. A number of activities which common sense indicates are sports are often excluded from the definition of being sports by the Charity Commission, including angling, ballooning, billiards, pool, snooker, crossbow shooting, rifle shooting, pistol shooting, flying, gliding, motor sports and parachuting. I declare an interest as a participant in one of those sports—while I am on my feet, I shall declare another interest, because I am married to the chief executive of a national charity.

Hilary Armstrong: My hon. Friend, whose main interest is in motor sport, recognises that we are, for the first time, classing amateur sport as a charitable purpose. In doing so, the main aim was to promote healthy recreation, so sport has been defined as, in many ways, involving physical skill and exertion. I am not sure how much motor sport fulfils that criterion. However, the Charity Commission, in consultation with the Department for Culture, Media and Sport, will be willing to consider any representations on what exactly the addition to charitable purposes will mean. As my hon. Friend suggests, and as hon. Members' earlier interventions made clear, once one puts any new definition into a Bill, there arise all sorts of questions about its interpretation. One of the aspects that Ministers are struggling with is the possibility that putting certain things into the Bill will raise uncertainties in the minds of charitable organisations, and others, as to whether they will be covered. I am anxious not to put money into lawyers' pockets, so I am being fairly careful in that respect.
	The scope of charities has developed over the centuries to reflect changes in what society has at any one time regarded as worthy of inclusion. Some sorts of endeavour, such as the relief of poverty, have always been seen as charitable, while others, such as the promotion of human rights, have been accepted relatively recently. Clause 2 provides a list of the many forms of charitable endeavour or charitable purposes, at the same time preserving the flexibility to recognise new charitable purposes in order to accommodate future changes in society. The Bill does not take away the charitable status of any purpose that is already charitable. No charity will wake up on the day after the Bill becomes law to find that as a result the purpose for which it exists has ceased to qualify as charitable.
	An organisation cannot be a charity unless its purposes are exclusively charitable. That means that its purposes must fall wholly within the purposes listed in the Bill. To qualify as a charity, an organisation must not only have exclusively charitable purposes but be for the public benefit. The Bill preserves the existing law on the definition and test of public benefit, with one change. Under the existing law, there is the presumption that charities established for the relief of poverty, the advancement of education or the advancement of religion are for the public benefit. Charities established for all other purposes do not benefit from that presumption. The Bill abolishes that presumption. That will create a level playing field on which all charities will have to show that they are for the public benefit. To do so, an organisation will have to show that it generates identifiable benefits that reach, or are available to, a sufficiently large section of the public. Given the great diversity of charitable endeavour, the nature of those benefits and how they reach the public will vary greatly.

Patrick Cormack: The right hon. Lady will know that the Christian Institute, among other bodies, has expressed concern about the withdrawal of that presumption. It worries, for instance, that missionary activities could be liable to reinterpretation. Can she reassure it, and me, that that will not be the case?

Hilary Armstrong: I can give the hon. Gentleman a clear reassurance that that will not be the case. However, I would like to clarify the position on the charitable status of fee-charging charities.

Bob Spink: I seek further clarification. When a charity registers, it must establish that it is working its activities in the public good. According to the Bill, it must also do so on a continuing basis. How often would that question be raised by the Charity Commission, and how burdensome might that ongoing requirement be for charities?

Hilary Armstrong: That will be for the Charity Commission to determine, but any charity already has to publish annually a report outlining what it is doing. That has to be public and I expect all organisations to take that opportunity to express what they are doing to meet the Bill's public benefit demands. It will be for the Charity Commission to issue guidance and to pursue the matter that the hon. Gentleman raised.
	As I was saying, I would like to clarify the Bill's position on the charitable status of fee-charging charities.

Andrew Turner: The Minister mentioned that charities would have to have "identifiable benefits", so will she explain the identifiable benefits of the advancement of religion?

Hilary Armstrong: The issue is based at the moment on case law. I know that religions could mention some significant aspects of what they do that relate to public benefit, though they may differ from religion to religion. It is nevertheless important for them to be clear, if they are securing taxpayers' money, that they are accountable. That is the whole purpose of public benefit. If organisations are exempted from paying taxes, they need to be able to demonstrate to the public how it will benefit. It is not identifiable in the sense that I can describe precisely what the benefits should be, but it is identifiable in that it must be clear that activities benefit the public in a way that the public can identify and respond to. The Bill is partly about securing public confidence in charitable status.
	I really must move on now to issues about fee charging. I am aware of considerable discussion among right hon. and hon. Members and the media about that matter, particularly with regard to the independent schools sector. Until now, owing to a presumption built up through case law, independent schools have automatically been granted charitable status if they requested it. Previous legislation, including the Charities Act 1992, did not deal with the problem, but the Bill before Parliament today will abolish the presumption that independent schools can be charitable simply because they provide educational services. For the first time, they will have to demonstrate public benefit in order to gain charitable status. That same principle will apply to all fee-charging charities in whatever sector they operate.
	Many organisations—whether they be a hospice, a local museum, an outreach programme or any other organisation that charges a fee but is charitable—provide vital services and are held in great affection by the communities that they serve, and the Bill will require each to be assessed on its own merits and judged accordingly. Several of my hon. Friends have already suggested that they would prefer an amendment to specify more clearly in the Bill what the public benefits should be. I remain to be convinced of the necessity of that and am anxious about the downsides. By trying to be more specific, we do not want to exclude organisations that should not be excluded. I hope that hon. Members, especially my hon. Friends, understand that we are determined that there will be a test of public benefit, which we expect to be meaningful, but that trying to identify matters too clearly frequently brings disbenefits that nobody anticipated.

Martin Horwood: The Minister has been clear about some of the organisations that would not be affected by the Bill's new version of the public benefit rule but will she clarify—for her hon. Friends as well as me—whom she would expect to lose charitable status as a result of the Bill? To be meaningful, the measure must affect somebody when compared with current legislation.

Hilary Armstrong: The measure means that every organisation that seeks charitable status will have to be clear about how it believes that it benefits the public, and the Charity Commission will assess that. The Charity Commission is the regulator, which will produce guidance. It is not its aim to ensure that some people lose charitable status. It will listen to what Parliament is saying, and I believe that Parliament is strongly of the view that it wants the public benefit test to be meaningful. I would expect the Charity Commission to reflect that in its guidance.

Alun Michael: I welcome my right hon. Friend's reference to the engagement of Parliament in the process. She is wise to resist too tight a definition but there is a great deal of knowledge in the House, and if the Charity Commission, in reaching its conclusions—as it must as an independent body—listens to Members of Parliament, that is infinitely preferable to a tight hand of legislation or Government. I encourage her to proceed in that way.

Hilary Armstrong: My right hon. Friend understands well how Ministers approach such matters. There are frequently so many different legal interpretations, and we do not want charities to become too engaged in legal cases. Another aspect of the Bill makes it easier for matters to be sorted out through tribunals. They should be sorted out on a case-by-case basis and I believe that the Charity Commission will listen carefully to what we say. I trust that it will be guided by what Parliament says.

Tom Levitt: My right hon. Friend knows that many independent schools have excellent drama, sporting, field study and other facilities and that, increasingly, state schools throughout the country are entering into partnerships and gaining access to those facilities. Does she believe that those independent schools will be more or less likely to share those facilities if they are forced to lose 4.5 per cent. of their income through the removal of charitable status?

Hilary Armstrong: My hon. Friend makes a good point. We intend to ensure that we get the best educational opportunities for every child in this country. The independent schools, in partnership with the state, can contribute to that aim. I would expect them to do so. I envisage the Charity Commission considering such direct and indirect benefits.

Patrick Cormack: The Minister gave a most helpful answer to my earlier intervention. I accept the point made by the right hon. Member for Cardiff, South and Penarth (Alun Michael). Will the Minister ensure that the Charity Commission's attention is drawn to what is said not only on the Floor of the House today but in Committee and during remaining stages? It is important that it knows that Parliament is passing it great power, and is not asking it to nit-pick, ride hobby-horses or have agendas, but to consider, in the broadest way, what can deliver benefit and good to the public, and interpret matters accordingly.

Hilary Armstrong: I thank the hon. Gentleman. I hope that I have made it clear to the House that I would encourage the Charity Commission, although I would not want to interfere in its independence, to take note of all our debates on the Floor of the House and in Committee.
	Part 2 of the Bill is divided into 11 chapters, each of which deals with some aspect of the regulation of charities. Chapter 1 of part 2 converts the Charity Commission into a corporate body. Currently, its functions are discharged by the five charity commissions. The chapter also contains reforms to the commission, modernising its constitution, governance and powers to build on its current effectiveness. We are giving the commission five new statutory objectives and are requiring it to report annually to Parliament on the extent to which it has met its objectives. I hope that that reassures the hon. Member for South Staffordshire (Sir Patrick Cormack) and others about the commission's relationship to Parliament.
	We are also putting the commission under a duty to have regard to the principles of best regulatory practice, including the principle of proportionality under which a regulator's action must be proportionate to the risk posed by the problem with which it deals. We included that Joint Committee recommendation after listening carefully to the debate in the other place. In fact, the commission already operates in accordance with that principle, and recent surveys have recorded the high levels of satisfaction among charities that have dealt with it.
	The commission is and will remain a non-ministerial department. We believe that its independence from Ministers is of paramount importance for the proper regulation of charities and for public confidence in the regulatory system. The Bill expressly prevents any Minister from controlling or directing the commission in its regulatory work. Those changes are to ensure that we have a Charity Commission that is independent and emboldened but accountable, regulated and effective.
	Chapter 2 of part 2 creates a new charity tribunal. At the moment, anyone wanting to challenge a regulatory decision or order made by the commission must take it to the High Court, which is daunting and prohibitively expensive for the vast majority of charities. The new tribunal will provide a simpler, quicker and cheaper route through which to challenge the commission and improve its accountability.
	Chapter 3 of part 2 deals with the registration of charities. There are three main changes. First, the Bill raises from £1,000 to £5,000 the income threshold above which a charity must register with the Charity Commission. The Joint Committee on the draft Bill found that there was a consensus for a registration threshold of £5,000. Charities whose income falls below the threshold will be able to register with the commission if they so wish, which will give more freedom to smaller, local charities.
	Secondly, the Bill brings the arrangements for excepted charities into line with those for other charities. Excepted charities are those which fall within the regulatory powers of the commission but which are not currently required to register with it. They include some charities within the Church of England and other Christian Churches, and some charities within the armed forces. Requiring such charities to register will not significantly increase the regulatory burden on them but will rightly increase the transparency and accountability of those charities, which have exactly the same entitlement to tax relief as registered charities. To ease the transition from excepted to registered status, we are starting by requiring only those with an income of more than £100,000—the top 10 per cent. or so—to register. As we have said, we expect gradually to bring more of those charities into registration in future.
	Thirdly, the Bill introduces new arrangements for the so-called exempt charities, which will include the universities, other places of further and higher education, some registered social landlords and some museums and galleries. Exempt charities are those that are currently outside the Charity Commission's supervisory and monitoring powers. They enjoy the status and fiscal benefits that other charities have, but there is currently no mechanism for monitoring their compliance with charity law. The Bill changes that.
	When a regulator is already in place—for example in the case of registered social landlords who are regulated by the Housing Corporation—that regulator will take on responsibility for monitoring compliance with charity law. When no suitable regulator is already in place, the Charity Commission will take on that responsibility. The proposed new regulators have been identified following extensive discussion with the relevant regulators and charities, and will be prescribed by regulation. The purpose of the changes is to ensure that modern and effective regulation extends right across the charity sector, not just to some parts of it.
	Chapter 5 modernises the Charity Commission's regulatory powers. It includes new powers for the commission to suspend or remove trustees and employees from membership of their charities. Chapters 6 and 7 raise the income threshold above which charities must have their accounts professionally audited, releasing about 3,000 charities from that obligation.
	A development that we believe will be particularly useful in the longer term is the creation by chapter 8 of part 2 of a new legal form called the charitable incorporated organisation, or CIO. That could bring significant deregulatory benefits by allowing charities to take an incorporated form without having to submit to regulation under company law as well as charity law. A charity in CIO form will be treated and regulated as a charity, but not as a company. Existing charities will be able to take on CIO form, and new charities will be able to start up in CIO form.
	Perhaps three quarters of a million people in England and Wales are trustees of charities, giving their time, commitment and expertise, unpaid, to the service of others. Trusteeship is a demanding yet personally rewarding endeavour. We want to encourage more and a greater diversity of people to be trustees of charities.

James Duddridge: Would the Minister react warmly to the tabling of amendments that would allow people with learning disabilities to be trustees in organisations where there are learning-disability issues?

Hilary Armstrong: I never like to make commitments on amendments, but I should be very surprised if that were not already possible. I am fairly sure that it is, because I am fairly sure that I know someone with learning difficulties who is involved. I shall examine the position.
	Chapter 9 of part 2 contains three provisions that will be helpful to trustees in their stewardship of charities. The first will allow a charity to pay a trustee who is willing and able to provide his or her charity with a professional or trade service that it needs. I emphasise that the Bill will not allow payment of a trustee for carrying out the ordinary duties of trusteeship, nor will it allow charities' paid employees to be trustees at the same time. It preserves the voluntary principle of trusteeship which is part of the ethos of charity. The second provision will allow trustees to apply to the Charity Commission for relief from personal liability for breach of trust when they have acted honestly and reasonably, but their action has nevertheless caused some loss to their charity. The third will allow trustees to pay for trustee indemnity insurance using their charity's money.
	Those measures are intended to encourage more people to become or continue as trustees by giving them confidence that they will not be personally penalised for an honest mistake. The fear of having to pay out of one's own pocket to make good an honest mistake can be a real deterrent both to the taking on of a trusteeship and to innovation in the running of a charity.
	Chapters 10 and 11 of part 2 will allow smaller charities to alter their own constitutions without needing the Charity Commission's permission. The rules restricting charities' abilities to spend their capital endowments will also be relaxed, though the concurrence of the commission will be required before they may override the wishes of a donor who has given a large sum as an endowment on condition that only the income from it can be spent. Some legal and technical obstacles to mergers between charities will also be removed. Decisions whether or not to merge will of course remain for charities themselves: it is not the Government's role to procure mergers between charities or to put pressure on charities to merge. However, it should be easier for them to merge, if that is their wish.
	An important part of the Bill, part 3, is the reforms to the regulation of public charitable collections. The present arrangements do not work as well as they could, because different types of collection are subject to different sets of licensing rules, and because the rules are applied differently from one local authority to another. Through the Charities Act 1992 it was intended to introduce a new scheme for the regulation of fundraising, but the relevant part of the 1992 Act was never introduced because the proposed scheme was thought to be unworkable in practice.
	We propose in part 3 of the Bill a new, unified licensing scheme to iron out the inconsistencies. We responded to a recommendation made by the Joint Committee on the draft Bill by giving the Charity Commission the role of determining the eligibility of organisations to carry out public collections. Charities and other bodies wanting to carry out public collections will be able to apply to the Charity Commission for a public collections certificate lasting for up to five years. Public collections in the street will continue to require, as well as that certificate, a permit from the local authority to authorise the time and place of the collection. For public collections from house to house, which includes from pub to pub, a public collections certificate will be needed and the collection must be notified to the local authority. The Bill brings face-to-face fundraising, sometimes called "chugging", within the statutory licensing scheme.
	Elsewhere in part 3 there is a reserve power for the Government to introduce a statutory scheme for the regulation of charity fundraising generally. We have said that that power will be exercised only if self-regulation fails. I am glad to say that self-regulation, led by the recently established Fundraising Standards Board, is getting off the ground very well. The Government hope and expect that self-regulation will be effective in the longer term, although the power in the Bill will be available should self-regulation fail.

Tom Levitt: My right hon. Friend describes some welcome changes in regulation that involve some significant new powers and responsibilities for the Charity Commission. Can she assure the House that the commission will have the capacity and the funding to deliver on those powers?

Hilary Armstrong: My hon. Friend raises an important point. We are working with the Charity Commission so that we have a better estimate of what the reforms will cost. We will have to consider the situation once the figures are clearer than they are at present.
	Other provisions of part 3 include provisions to put beyond doubt the Government's power to fund charities and other voluntary organisations. That responds to the concern of the Home Affairs Committee about the lack of a proper statutory power for the Home Secretary's funding of voluntary organisations. The Bill gives the National Assembly for Wales the same funding power as it gives to the UK Government.

David Drew: I am surprised that the fiscal regime for charities is not addressed in the Bill and I hope that we will be able to take account of that in consideration of the Bill. In particular, the question whether VAT can be recovered is crucial in determining whether charities in the social and health care area are effective in spending their money. Is that an issue that the redefinition of charities will help to address? Discussions with the Treasury just seem to lead to even greater opacity.

Hilary Armstrong: I hear my hon. Friend, but the problem is that his "opaque area" carries a bill of about £500 million. In any financial matter, the Government must take an overall view about their priorities. It is always for the Treasury to take that view first, through the Budget and its proposals in the Finance Bill, rather than it being done in a Bill such as the one before us. Matters will move and change over the years, and the Government take the overall management of the economy very seriously. We have done very well at it, and I do not want to be the Minister who undermines it through something in this Bill, given that the economy is a matter for my right hon. Friend the Chancellor of the Exchequer.

Daniel Kawczynski: The hon. Member for Stroud (Mr. Drew) raised a very important question. In Shrewsbury, the League of Friends of the Royal Shrewsbury hospital raises hundreds of thousands of pounds every year to buy vital hospital equipment, which the Government do not therefore need to purchase. It is important that the Minister takes on board its view that it would benefit greatly from not having to pay VAT on that vital equipment.

Hilary Armstrong: That is a fair point, and many such points can be made. However, our investment in the health service means that that league and others can continue to purchase equipment and services that are often not central to the national health service. The leagues do a very good job, but we have put additional money into the health service—considerably more than £500 million. Priorities must be set and judgments made. I could make a comment, but I am not going to do so.  [Interruption.] I am sure that the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) knows that it might be about the investment in the health service, and who supported it and who did not.

Daniel Kawczynski: The hon. Lady is being charitable.

Hilary Armstrong: I am.
	Part 4 contains the final provisions, including one that will require the Government to commission a general review of the operation of the Act within five years of Royal Assent and to report it to Parliament. That is an important provision. We will then be able to consider some questions about which hon. Members, for perfectly sound reasons, have concerns. The Government are introducing the Bill, but the regulator will be at arm's length—at least—from the Government. Parliament will want to review how measures such as the public benefit test are interpreted. We will have the opportunity to do so, because the Bill provides for a review within five years. The Bill will allow us to judge the legislation's effect on various matters, including public benefit, as I said, and public confidence in charities.
	Another provision in part 4 will pave the way for the consolidation of charities' statute law to make it easier for charities and their advisers to read and understand the law. I am sure that many of us welcome that.
	The Bill will support the work of thousands of people and organisations, working throughout the country to make a real impact on their communities, by improving the ways in which charities are run and regulated. The Bill's overall effect will be deregulatory. It will liberate charities and enable them to provide an even better service, while ensuring that they are fairly and rigorously accountable to the public.
	The Bill enjoys high support from people in the voluntary and community sector, many of whom have been involved in drafting it. It gives me great pleasure to present it, and I commend it to the House.

Andrew Turner: I welcome the Chancellor of the Duchy of Lancaster and her Parliamentary Secretary to their new responsibilities. It must be a great relief to the right hon. Lady to be relieved from the vow of silence that binds the Government Chief Whip, and I am sure that it will do us all good to benefit from the additional intellectual weight that the hon. Member for Doncaster, North (Mr. Miliband) brings to the new office of the third sector.
	Last week, I talked briefly to some youngsters in my constituency about the Bill. One aspect of it interested them. It was not the public benefit test or the establishment of the charity tribunal. It was not even the transformation, after 400 years, of the charity commissioners into a body corporate. The thing that interested them was the section on fundraising and whether we will retain the ban—as they see it—on volunteers shaking their tins during street collections. Those youngsters, like youngsters nationally, are the best—they keep up a tradition of fundraising for charity at the numerous carnivals in my constituency, which date back to the first documented carnival in Britain that took place in Ryde in 1888. However, as collectors compete with the amplified music on many carnival floats and with bands such as the Medina marching band, the Wight Diamonds or the Vectis corps of drums, and 40,000 excited spectators, it is difficult for them to draw attention to themselves if they are banned from even rattling their collecting tins. If local councils have the power to impose such a ban—many people think they do—they should use it sparingly, if at all.
	I would not be forgiven if I did not pursue that point in Committee because little things, as well as strategic issues, matter in legislation. If we get the little things wrong, as the Licensing Act 2003 is demonstrating, we disrupt people's lives and destroy the local voluntary effort that is at the heart of much charity work, whether it is fundraising for large charities such as the National Society for the Prevention of Cruelty to Children, with a national turnover of nearly £90 million a year, or for small charities such as the Isle of Wight Historic Lifeboat Trust, with an annual turnover of between £5,000 and £10,000.

Meg Hillier: As the hon. Gentleman canters through his proposals and comments on the Bill, will he tell me whether he agrees with the right hon. Member for Witney (Mr. Cameron), who wants to set the voluntary sector free, or with the 19th-century philanthropic view of the voluntary sector espoused by the chief executive of the Association of Chief Executives of Voluntary Organisations, or with the view expressed by the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith)?

Andrew Turner: I shall return to the issue of the 19th-century philanthropic view of charities, but of course I agree with my right hon. Friend the Leader of the Opposition.
	Although it is important that charities are effectively regulated to protect the charity brand and to ensure that donations are properly used in pursuance of a charity's objectives, we should not, by over-regulation, drive out individuals who have an appetite to help their fellow man but do not desire to become bogged down in bureaucracy.

David Taylor: The hon. Gentleman unsurprisingly pledges loyalty to the views of his party leader. He referred to the NSPCC in warm terms. Does he accept and endorse the views of a previous Conservative leader, the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), who urged the NSPCC to stop shouting and start working? Is that the hon. Gentleman's view of the NSPCC?

Andrew Turner: I congratulate the hon. Gentleman on getting to point 2 on the parliamentary Labour party sheet. My belief is that we should assist charities to do their jobs better. Many of them—in fact, virtually all of them—want to do that.
	At a time when all political parties are enthusing about the role of the third sector in the supply of public services, it is as well to remember that charities and voluntary organisations were the first providers of public services. That is because they were set up by a diverse, and sometimes eccentric, range of individuals and groups to do the good that those individuals and groups wanted to do. Some of that will fit into a national or local strategy, but much of it will not. Those benevolent institutions have continued to serve their public right into the 21st century, while the state has learned from them and taken on some of their responsibilities. Some of that state involvement was to ensure equity of access to essential services; some was rooted in the belief, sadly reflected in the words of a Government Back Bencher, that
	"philanthropism...applied in the 19th century"
	and that
	"private charity is no substitute for organised justice."—[ Official Report, 15 March 2006; Vol. 443, c. 1541.]
	That sentiment is now thankfully rare and the value of the voluntary sector as a deliverer of services, an innovator and a social entrepreneur is recognised and celebrated across the political spectrum.
	Indeed, the Government's confidence in community organisations as deliverers of change, in relation to foundation hospitals and trust schools, has sometimes found more support on the Conservative Benches than on the Government Benches. None the less, I welcome the Prime Minister's announcement last week that there is no longer an ideological barrier to involving the private and voluntary sectors in the delivery of public services. Perhaps, as Steve Bubb, the chief executive of the Association of Chief Executives of Voluntary Organisations, told the  Financial Times on Friday,
	"things are finally beginning to move"
	after repeated pledges since 2000, but limited action. Like him, we will believe it when we see it. The  Financial Times said:
	"Tony Blair announced a review of the procurement and supply of community equipment worth £200 million a year. This included everything from wheelchairs to the provision of aids needed to keep people out of care homes and to get them out of, or prevent them from entering, hospital.
	"Big organisations including the Royal National Institute for the Deaf and Royal National Institute for the Blind and the Red Cross will be involved in the review and will be encouraged to bid for the revamped service that will result."
	I am underwhelmed. Out of an NHS budget of £75 billion, the Prime Minister is able to find £200 million-worth of work for the charity sector. I have news for him: in my constituency, the Red Cross already has that sort of contract. He will have to do better than that to turn his good intentions into reality.

Tom Levitt: I was present at the conference at which the Prime Minister gave his speech on Thursday, as was the Parliamentary Secretary, my hon. Friend the Member for Doncaster, North (Edward Miliband). The Prime Minister's announcements, of which that was one example—we are talking about something that is in addition to the valuable work that the voluntary sector already does in the health service—were widely welcomed not just by people from the third sector and the voluntary sector, but by everyone at that conference, including partners in the private sector and the local government sector. It was a good conference with a positive outcome that will take us forward in a way that the hon. Gentleman's Government never managed to do in the past.

Andrew Turner: Of course, we all welcome the sentiment. The question is how long it will take the Prime Minister to implement sentiments that he expressed in 2000.
	It is right for the Government to see the third sector as an alternative provider of public services, but they must realise three things. If a charity is commissioned to deliver a service, it must be able to decide how. Voluntary organisations work so well because, as the Chancellor of the Duchy of Lancaster said, their independence leaves them free to innovate. If Governments—national or local, of whatever political colour—prescribe how the service should be provided, the hard-won expertise of those charities will be wasted and the contract will not be delivered as well as could have been the case. If one sets up a national or regional contract—perhaps that is what the Prime Minister intends for home-care appliances—one loses the local autonomy and local commitment, and probably the local fundraising, which add love and care to contract delivery.
	If we demand that voluntary organisations meet the Government's objectives too closely, we may find, as the National Council for Voluntary Organisations suggested in its discussion paper in 2001, that each
	"may be perceived as little more than an agent of the state."
	It is essential that charities are not too restricted so that the public continue to trust them. Furthermore, we have known for years that too many Government contracts with charities and voluntary organisations last only a single year. Funding often arrives late from Departments. If a contract is too short, long-term planning is impossible and organisations cannot take the risk of investing for the future. Indeed, they sometimes have to divert other income to keep the contract afloat. Staff become uncertain about the future and thus look for new jobs, and delivery declines and the vulnerable suffer.

Meg Hillier: The hon. Gentleman is being dismissive of the important step that the Prime Minister announced. I speak as someone who saw one relative die while waiting for a wheelchair to be provided by a private company on contract, while another waited six months. In the meantime, it was the voluntary sector that provided. The view of the Prime Minister and the Government that such things should be provided properly and well through a good contract with the voluntary sector is the right step forward.

Andrew Turner: The hon. Lady is absolutely right. I have no dispute with that at all.

Tom Levitt: The hon. Gentleman should read the Prime Minister's speech of last Thursday in which he identified the problem of short-term funding. We are addressing that through the way in which local authorities and others are funded, and it should also be addressed through the way in which the voluntary sector is funded. Is the hon. Gentleman aware that the sector is a partner in the delivery of services? The nightmare scenario that he described will not happen in a proper partnership in which the views of different sides are respected. If the partnership cannot agree how the services should be delivered, there simply will not be a partnership, but we will not see the nightmare about which he talks.

Andrew Turner: I am not sure that I was talking about any kind of nightmare at all. I was saying that there is a great opportunity for the voluntary and charity sectors.
	The problem is that seven out of 13 Departments still do not even keep records of whether funding is agreed before the beginning of the financial year, or of whether their contracts run for more than one year, despite the advice of the Public Accounts Committee. Of those Departments that kept records, the Northern Ireland Office was best—I congratulate it on that—but the Home Office, which was the sponsoring Department for the voluntary sector, was worst.
	The Bill is important for the charity sector and the people and purposes that that sector serves. It has already been thoroughly scrutinised. It was one of the first Bills to be subject to pre-legislative scrutiny and it has twice been rigorously examined in another place. However, several provisions remain that will need to be debated and, perhaps, amended in Committee if the Bill is to allow the sector to meet its potential.
	The most contentious matter is clearly the public benefit test. Since the 17th century—and in codified form since 1891—there has been a requirement to demonstrate public benefit for most charitable purposes. However, as the Minister said, there has been a presumption of public benefit for the relief of poverty, the advancement of religion and the advancement of education. The Bill will abolish that presumption, so any organisation with a charitable purpose will have to demonstrate a public benefit. The Bill provides for a tortuous and near-incomprehensible formula. Ministers have reassured Parliament that although that will mean that our case law will be allowed to develop, the public benefit test will remain unchanged.
	Three groups seem to want to the public benefit test to become more onerous. The first is represented by the Charity Commission, the NCVO and, rather surprisingly, the British Red Cross. The second is a group of lawyers and others who think that although the law on charities has never been the same in England as in Scotland, there should be a post-devolution situation in which Scotland drives England. I was grateful to the Minister for pointing out the objective that the three legal systems should be compatible, but not identical. The third group is the few Government Back Benchers who are chaffing at their failure to maintain the iron grip of mediocrity on Britain's state schools, with the support, for some reason, of the illiberal democrats to my left. Their motive is essentially to strike down independent schools, which have shown that pupils can get a better education than they could have done from the state. They ignore the damage done to voluntary hospitals and to charitable retirement homes. They do not seem to have thought of the effect on universities, all of which have always charged fees.

David Taylor: I thank the hon. Gentleman for releasing his iron grip on what is a mediocre speech. Can he say whether Her Majesty's Opposition are likely to support a wholly admirable and worthwhile amendment that is due to be tabled and that would prevent organisations that charge unduly excessive fees from being granted charitable status?

Andrew Turner: In my speech, which the hon. Gentleman kindly described as mediocre, I was about to say that we will support the Government in voting down proposals for a more onerous public benefit test. I prefer—

David Lepper: I take the hon. Gentleman back to a comment he made a few moments ago. I paused before intervening because I wanted to think about what he said. Did he really mean to say that most state education is mediocre, or did I mishear him?

Andrew Turner: I can assure the hon. Gentleman that he did not hear those words.
	I prefer to look at the presumption of public benefit from another direction. Its abolition will create extra work for the Charity Commission and impose a greater bureaucratic burden on charities. If they have to divert resources toward demonstrating public benefit, that will reduce the amount of good that they are able to do.

Daniel Kawczynski: My hon. Friend mentioned that private schools will be affected. He will know that one of the best private schools in the country—Shrewsbury—is in my constituency. It does a lot for charity and is very good for the community in Shrewsbury. These plans will affect it, and I am worried about the impact on it of the extra bureaucracy involved in meeting these requirements.

Andrew Turner: I am concerned about the impact on schools such as Shrewsbury, but I must say that I am far more concerned about the impact on small and much less expensive independent schools that benefit from charitable status and fulfil a public benefit by providing education.
	I find it inconceivable that a charity whose objective is the relief of poverty would not, prima facie, be providing a public benefit. Can any Member suggest that a trust for the relief of poverty would not be providing such a benefit?  [ Interruption. ] The Minister for the Cabinet Office says "No", but money spent on proving that what is provided is a public benefit, or on adjudicating on that question, is surely money wasted.
	Secondly, removing that presumption from organisations for the advancement of religion is absurd and opens up a huge debate about whether religious activities have a public benefit. I am talking not about the activities that flow from religion, as most of them are covered by other charitable purposes, but about directly religious activities such as prayer and moral leadership.

Martin Horwood: Am I right in thinking that the hon. Gentleman is therefore retreating even from the position of his noble Friends in another place? They said that "all charities" should
	"have to meet a public benefit test, no matter what their purposes are".—[ Official Report, House of Lords, 28 June 2005; Vol. 673, c. 154.]
	That is the view of the Conservative party in the House of Lords, which is hardly the most progressive of organisations.

Andrew Turner: I am asking Ministers, either now or in Committee, to justify requiring organisations for the relief of poverty to spend time and money demonstrating that they provide a public benefit.

Hilary Armstrong: rose—

Alun Michael: rose—

Andrew Turner: I will give way to the right hon. Lady.

Hilary Armstrong: I think that the hon. Gentleman has misunderstood the Bill. He is absolutely right in saying that a presumption has been removed, but there has always been the view that public benefit ought to be able to be demonstrated. Every organisation is now expected, as it registers, to publish information annually, so that the public know what it is doing, what its objectives are and how it is fulfilling them, and how it is raising money. Most organisations also want to tell the public what they are spending that money on, and that they are not spending it mainly on administration. I do not believe that individual organisations will face any additional costs if they are already seeking to inform the public properly. One of the purposes of the Bill is to maintain public confidence in the charitable sector, and the only way to do that—

Mr. Deputy Speaker: Order. The right hon. Lady has made her point.

Andrew Turner: I am grateful to the right hon. Lady for having attempted to explain a difficult point. I would like to know the justification for organisations for the relief of poverty spending money on demonstrating that what they do is not only charitable—that is, it falls within the definition of charitable purposes—but for public benefit.

Alun Michael: Does the hon. Gentleman accept that even if the presumption remains, such organisations ought to show how they are producing value for the public benefit? Will he turn his eyes to the fourth of the categories of charitable purpose in the Bill, which is
	"the advancement of health or the saving of lives"?
	Is it not sensible to establish a level playing field whereby all organisations are subject to the same light regime—not a heavy bureaucratic one—and the same requirements?

Andrew Turner: I do not think that it is possible to come up with an example of an organisation for the relief of poverty that is not conferring a public benefit. I shall talk about the fourth category of charitable purpose, but first I want to finish my point on religion.
	Can any hon. Member say what it is in religious activity that confers an identifiable public benefit—the words used by the Minister for the Cabinet Office? I am talking not about the relief of poverty, which is ancillary to much religious activity, but about religious activities such as prayer and moral leadership. How is an organisation to go about demonstrating the public benefit of prayer, which is work for the advancement of religion? How does one demonstrate objectively that prayer offers a public benefit? It may in fact be extremely difficult to prove that the work of an organisation for the advancement of religion is for public benefit, and our fear is that the way will be opened to interminable disputes, which will be no more than a job creation scheme for lawyers and the Charity Commission.
	Finally, who can argue that education is not for public benefit?

Meg Hillier: In my constituency, there are many groups of different faiths, and it would be hard for me to find a single one that did not provide some demonstrable public good other than moral leadership and prayer, to which the hon. Gentleman referred. If I would find that hard in my multicultural, multi-faith constituency, I suspect that that would be true in other parts of the country.

Andrew Turner: That is precisely the point that I was trying—clearly unsuccessfully—to make. The good, other than prayer and moral leadership, is covered by other charitable purposes. The Bill requires a religious organisation, if it is claiming charitable status only under clause 2(2)(c), to demonstrate that the religious activity itself—the prayer and moral leadership—gives a public benefit. I am at a loss to see how one demonstrates the public benefit of prayer.

Martin Horwood: It seems to me to be fairly demonstrable that if a large number of people take comfort from prayer—they can be asked whether it comforts them—that is a public benefit. However, my question is on the relief of poverty. The hon. Gentleman said that he could not imagine an organisation for the relief of poverty being challenged on whether it is in the public benefit, but I remember that when I worked for Oxfam in the 1990s, large numbers of Conservative Members fairly frequently challenged Oxfam and other voluntary organisations on whether what they were doing was in the public benefit. Does the hon. Gentleman wish to return to that situation?

Andrew Turner: The hon. Gentleman fails to recall what was happening at that time. Challenges were put to some charities that they were campaigning politically, not that they were failing to confer a public benefit. The challenge was that they were also unlawfully campaigning using charity money. Some people have changed their views on that.
	Who can argue that education is not for public benefit? The principal argument for education being provided at the taxpayers' expense is that it is in everyone's interest that we have a better educated nation. The Chancellor of the Exchequer argues that we should extend free education across the developing world, presumably for the same reason. How can it be argued that education that people pay for—those who can afford to do so—is of less benefit than other benefits? In all of these instances the Bill moves the onus. No longer will the Charity Commission have to show that an existing charity is not for public benefit. In future, each charity will have to show that it is for public benefit, making some charities that have lasted for hundreds of years guilty until proven innocent. Just in case anyone advances the argument that an individual charity may not be as beneficial as it should be, I remind the House that the removal of the presumption is merely that.

Edward Miliband: I am grateful to the hon. Gentleman for giving way during his extraordinary speech. Does he agree with the principle that all institutions that benefit from the taxpayer through charitable status should have to demonstrate public benefit? That is the principle that is at the heart of the Bill. I thought that that principle commanded consensus in the House.

Andrew Turner: There are two answers to that. First, since 1891 that has not been the case. That was codified at that time. Secondly, I think that it was Gladstone who thought that tax relief was public expenditure. I do not share that view. Tax relief is people keeping their own money, not the state spending money.

Edward Miliband: I do not want to get into an argument with the hon. Gentleman about tax versus public expenditure and the distinction. There is no question that a more beneficial tax regime that is available for those organisations that have charitable status is beneficial, and it represents a loss to the Exchequer. I ask the hon. Gentleman a simple question, as he speaks for the official Opposition on these matters. Does he agree with the principle that all institutions that benefit in this way should have to demonstrate public benefit? We on the Government Benches do and, I think, so do the Liberal Democrats.

Andrew Turner: We must balance the benefit that comes from demonstrating that against the loss to charities and the cost to the Charity Commission of so doing. I believe that there will be additional bureaucracy and uncertainty loaded on to charities as a result of what is proposed.

Alan Milburn: I, too, will ask the hon. Gentleman a simple question. He knows that public benefit is at the heart of the Bill. Is it his intention to lead his troops through the no Lobby this evening?

Andrew Turner: That question is somewhat premature. I am sure that the right hon. Gentleman will find out before the end of my speech. I know that he was a member of the Joint Committee. I shall answer his question later.
	There are some who have advanced the argument that an individual charity may not be as beneficial as it should be. I remind them that the removal of the presumption is only a removal of the presumption. Even where it remains, the commissioners can now, and will be able to do so in future, intervene—as they did in the case of the Finsbury Park mosque, or refuse registration as they did in the case of the Scientologists—where an applicant looks likely to go off the rails. We are not conferring on every charity for ever, even in the three categories that I have mentioned, the presumption of public benefit. It is more than the presumption of public benefit.
	The lack of a definition of religion is causing some concern. The definition is important to ensure that those organisations that are traditionally viewed as religious are able to maintain their charitable status while preventing other organisations that are merely philosophical from meeting that definition. This part of the Bill needs further work to secure a satisfactory definition.
	There is great concern about the commissioners' proposal to
	"interpret the public benefit requirement in the light of...modern conditions",
	as it would constitute a major attack on religion if it were judged only in modern terms. It is possible to initiate complaints to the commission but, given the time-consuming inquiries that would ensue, that would significantly disrupt and undermine a charity's activities.
	One of the biggest problems facing the sector is over-regulation. Far from reducing the regulatory burden on charities, as the Minister for the Cabinet Office claimed, the Bill increases it, and we have already heard evidence of over-zealous interpretation of the charity commissioners' role. I received a letter from Girlguiding UK last week, which said:
	"Recent emphasis in Charity Commission publications on the responsibilities of charity trustees and the prospective penalties for non-compliance is unhelpful to a largely activity-based organisation... Insistence on highlighting charity trusteeship is discouraging adult volunteers."
	I welcome the Minister's assurance that the Bill recognises and reduces trustees' fears, and we will examine that assertion with interest in Committee. We should all focus on the need to reduce bureaucratic demands on charitable organisations if we wish to avoid driving the doers out. Some new regulatory measures should be removed from the Bill, including the £100,000 asset limit on registration, but the £5,000 threshold should be increased. I am concerned that double regulation will be imposed on charities that have hitherto been exempt, such as universities, and I am surprised that they are prepared to be regulated not by the independent Charity Commission, but by the Higher Education Funding Council—a creature of the Education Secretary.
	The Bill does not say anything about making the commission's annual public meetings accessible to as many representatives of small charities as possible, but it is important to do so if such charities are to continue to play a vital role in the sector. We welcome the creation of the charity tribunal, which provides a resolution procedure for disputes without resorting to High Court, and thus reduces costs, but greater transparency is required. The Bill does not allow for the award of compensation to charities by the tribunal, the commission or, in a case of maladministration, the ombudsman, and it does not include a provision to assist charities and trustees that wish to refer the commission to the tribunal. Charities must be able to challenge the commission's decisions before the tribunal without hazarding charitable funds, so the proposal of a suitors' fund for that purpose is attractive, and the commission is well-placed to resource such a fund.
	Above all, charities must not be diverted from meeting their objectives, and in times of difficulty those objectives must be protected. When the tribunal makes decisions it can award costs, but there is no protection to ensure the survival of a charity that could become bankrupt in attempting to meet such costs, so we propose that the tribunal be required to take charities' long-term survival into account when awarding costs. We propose, too, that the commission—not the charity—meet the costs of an appointment of the interim manager—previously known as the receiver.
	Finally, the Bill can take further steps to make charities more accountable, and representatives of trustees such as local authorities should be required to act in a charity's best interests. We welcome the fact that the commission has been established as a non-ministerial Government Department, but it should be accountable to Parliament through a Select Committee. Appointments to the commission should be subject to Select Committee approval, to ensure that the commission is openly accountable to Parliament and hence to the public. The Bill gives the commission three jobs—to provide advice, to regulate, and to police—but it will sometimes be hard for charities to distinguish between those roles. The commission should be required to make clear what is advice and what is policing so that charities neither inadvertently break the law nor are unduly circumscribed in their activities because there is a lack of clarity from the commission.
	In conclusion, we support the Bill's overall aims and we wish to see it make reasonable progress, especially after 110 days' delay between First and Second Reading. We will work with the Government to turn the Bill into the best framework possible within which charities can provide the best services possible to the public. Most charities were around long before we were, and will be around long after. We have a duty to hand them over in good shape, and the Bill must put no obstacles in the way.

Alan Milburn: It is an unusual event, at least nowadays, that a Government Bill receives an almost universal welcome, but that is what this Bill by and large has received from charities, from organisations representing charities, from commentators, from the media, even from many lawyers, with the possible exception of the hon. Member for Isle of Wight (Mr. Turner). Given the consensus around the Bill, I was beginning to wonder whether there was something wrong with it. But having heard the hon. Gentleman's pretty extraordinary speech, I am beginning to believe that most things about it are right.
	As my right hon. Friend the Minister for the Cabinet Office was kind enough to say earlier, I was privileged enough to be able to chair the pre-legislative scrutiny Committee dealing with the draft Bill some two years ago, and I should like to take this opportunity to pay tribute to the officials and advisers who served us admirably on the Joint Committee, and to those colleagues on both sides of both Houses, who, without exception, were a joy to serve with and to chair.
	I like to think that the report that we produced, in keeping with the consensus around the Bill, was also pretty consensual, in tone and outcome. There is only one small caveat, which is that I cannot be held personally responsible for all the conclusions because, sadly, I had to leave the Committee before it finalised its conclusions in order to rejoin the Cabinet, and for the rather less consensual purpose of co-ordinating the Labour party's general election campaign. I like to think that the Joint Committee was a successful endeavour, and I like to think that the general election campaign was reasonably successful too.
	I remain a real convert to the pre-legislative process. I very much endorse what the hon. Gentleman and my right hon. Friend said. That process is far less partisan and far more open to analysis and debate, and, as a consequence, makes, where it is possible, for far better law. Indeed, I should like to see it go much further in this House and in the other place.
	The fact that the Government also took on board so many of the Committee's deliberations is testimony to Ministers' willingness to listen in order to improve the Bill's content. I welcome in particular the decisions to guarantee the independence of the Charity Commission; to improve the proposed licensing arrangements for public collections, to which my right hon. Friend referred; to consolidate, importantly, charities' legislation, once the Bill has successfully completed its passage through the House; and finally, and very importantly, my right hon. Friend's preparedness to review the performance of the Bill in the real world five years following its completion. Each of those changes has undoubtedly improved the Bill, as will have the detailed scrutiny that it has already received from the very many charity experts in another place.
	There are three principal reasons why the Bill is needed. The first is the necessity to modernise what is at best outdated and at worst pretty chaotic charity law. 1601 was no doubt a very fine year. It was for Her Majesty Queen Elizabeth I. She managed to thwart a rebellion led by the Earl of Essex. It was a less successful year for the Earl of Essex because he was beheaded. I do not say in any way, shape or form to my hon. Friends that I am looking for such a measure to deal with latter day rebels, although I bet that on occasion my right hon. Friend when she was Chief Whip would have welcomed that for certain of my hon. Friends.

Andrew Mitchell: Name them.

Alan Milburn: I shall resist the temptation to name them. However, 1601 was also the year when charities legislation was first codified. Perhaps understandably given the huge amount of case law covering the work, the purposes and so on of charitable organisations, that legislation requires modernisation, and it is not surprising that the National Council for Voluntary Organisations has called the current law, "complex and inconsistent".
	Secondly, today's charitable sector would be completely unrecognisable to those who set out the first framework for charitable law, and it is characterised by its huge diversity and enormous size. As my right hon. Friend the Minister has said, there are about 200,000 charities, which have an income of almost £40 billion a year. Charities, from the smallest to the largest, play a hugely important role in our country and, indeed, in each of our constituencies. Taken together, charities and the wider voluntary sector employ more people than the national health service, which makes them as big, if not bigger, than the Chinese red army or the Indian Railways, although they are hopefully more enlightened and efficient.
	Although the mainstay of the sector remains small, volunteer-led, locally run charitable organisations, we have seen some formidable and fundamental changes in the nature of what charities do and in the way in which they look in recent years. Organisations such as Turning Point, the British Red Cross and the Royal National Institute for Deaf People belie the image of an amateur, poorly run, volunteer-led organisation. Such organisations are extremely successful, extremely large and extremely professional, and they make a real difference—for example, housing associations are the main providers of affordable homes in our country nowadays.
	Organisations such as Christian Aid, Oxfam, Save the Children and the Red Cross play an important role in development. Most instructively, voluntary hospices have not only become the main providers of care for the terminally ill, but given birth to a new branch of modern medicine in this country and throughout the world.

David Drew: On the roles and functions of organisations, the number of social enterprise organisations is clearly growing. Will redefining the law on whether charities are fit for purpose help social enterprises to expand? Social enterprises are clearly not set up with charitable purposes, but they are not private businesses and are obviously not part of the state.

Alan Milburn: My hon. Friend has made an extremely good point. The voluntary sector is now characterised by huge diversity not only in terms of size, but in terms of form—there are social enterprises, community organisations, residents' organisations and charities.
	In a moment, I shall touch on the point that the Government have tried in this Bill and other legislation to make it easier for voluntary organisations to choose from a variety of different legal forms. My right hon. Friend the Minister has referred to the charitable incorporated organisation, which we touched on in Joint Committee, and there are other forms, too. I welcome the blossoming in voluntary and community organisations, which are making a difference in how services are delivered not only locally, but nationally, and I welcome the diversity that we are beginning to see within the voluntary sector.
	The third reason why the Bill is needed is that the right framework of law and regulation can help realise the potential, which the hon. Member for Isle of Wight has touched on, that undoubtedly exists for the sector to grow even further, which would help the Government to deal with some of the formidable social challenges faced by a modern society such as ours. Because charitable organisations are often grounded in local communities, they are well placed to grow social capital, which can deal with big social issues such as fighting crime, improving health or regenerating communities. Some of the most inspiring people whom I have met in my constituency are members of community organisations who are leading the local effort to tackle such types of disadvantage.
	The truth is that we now live in an era in which, by and large, citizens are far more informed and inquiring; they know more and want to be engaged more. The old proposition that our job here is to do things to people no longer applies—doing things with people holds the key to progress. In that context, charitable and voluntary organisations have an enormous role to play. A vibrant voluntary and, in particular, charitable sector forged from the combined efforts of millions of unpaid volunteers should surely be the bedrock of a modern civil society based, as it is, on active citizenship.
	In other words, charities can do more than do good—they have at least the potential to change the way in which our country is governed. That is long overdue. For decades, policymakers—this is not a partisan point, as it applies to all parties of Government—have practised a top-down approach in dealing with the big social issues of the day. I see that graphically illustrated in my own part of the world, the north-east, where the inner-city regeneration schemes of the 1970s and the 1980s were characterised by one thing—the pouring in of millions, in some cases hundreds of millions, of pounds of public investment, with, at its heart, the fallacy that was the failure to consult and, more importantly, to involve the residents who were the supposed beneficiaries of such resources. It is hardly surprising that such schemes came and went, came and went again, and failed. Some of the new programmes that I am proud to say that this Government have pioneered, such as the new deal for communities, have begun to change that top-down approach and to substitute a bottom-up approach whereby local residents are not only consulted on, but involved in, how services are provided and how their communities are run.
	However, we need to go beyond individual initiatives, however good they might be, to a wider approach encompassing what the Government do, and how the state behaves, to empower individual citizens and local communities to take greater control and thereby exercise far greater responsibility for themselves. That is where charities not only have a key role but stand before an open goal. Over recent years, the reforms that the Government have made in our public services to introduce common standards and systems of inspection allow our country to make progress towards a system that is commonplace in other European countries, where the origin of the provider becomes far less important than the quality of services that they provide.
	In local government nowadays, more and more services are run by the private sector. In social services, the majority of elderly care services have been contracted out to the private sector. There are issues about standards and so on, but by and large it is fair to say that standards are better than they were 10 or 20 years ago. In education, we have more partnerships between the public and private sectors. I would argue that those partnerships have helped to drive up standards, particularly in the most disadvantaged communities. As for health, when I was Health Secretary I signed a concordat with the private sector. That was not universally popular with Labour Members, and was indeed subject to a great deal of criticism from Opposition Members. We brought in new overseas providers, again from the private sector. The end result has been to improve standards and outcomes and to shorten waiting times to the benefit of NHS patients.
	The next step is to move beyond an automatic assumption that the only alternative to the public sector is the private sector. Over the next decade, the charitable and voluntary sector should become as integral to public service delivery in Britain as either the public or the private sector. It can help to open up public services so that they become far more responsive and offer those who use them far greater choice.

David Taylor: My right hon. Friend eulogises the benefits that he asserts have resulted from partnerships between the private and public sector in the world of education. Does he not accept that at least some of those benefits have been somewhat tokenistic and that most partnerships have come about as a result of sharing sports facilities, musical access and so forth? Very few indeed have been rooted in the sharing of teaching and learning skills of a more conventional nature.

John Bercow: With friends like that!

Alan Milburn: Thank you to my supposed hon. Friend, or whatever he is. I will come to precisely that point in a few moments. When the Joint Committee was taking evidence, we heard about some good examples of meaningful partnership between the private and state sector, particularly in education. To be honest, we also heard about some pretty poor examples, where the lack of partnership between the sectors was more evident. In large part, the test of public benefit, which some have decried, can help to address the deficiencies and to realise the potential of partnerships. I will return to that theme in a moment or two.
	It seems to me that, if we can get the framework right, the voluntary and charitable sector could be doing far more than it does. I have never really understood, for example, why voluntary or charitable organisations should not be able to run more welfare to work or child care programmes. I have never understood why cancer charities should not be given the opportunity to run more cancer services. I would certainly like to see us building, as a society and a country, on the pioneering work undertaken by an organisation such as the Royal National Institute for Deaf People in negotiating substantial discounts on behalf of NHS patients on the supply of digital hearing aids and then going on to work with NHS hearing services in order to ensure that those aids can be properly provided and fitted to the deaf or hard of hearing.
	My argument, unlike that of the Conservative party, is not that charities can or should replace the state, but that the public sector, the voluntary sector and the charitable sector should be partners rather than rivals. While charities can do much more, there is much that the state, for reasons of efficiency and equity, has to do. In truth, in this era of worldwide terror, mass migration and global competition in which we live, only Governments can provide security to citizens. Modern Governments, however, have another equally critical role—to empower more people so that the opportunities that some have always enjoyed are redistributed more widely in our society and it is here, I believe, that the charitable and voluntary sector comes into its own.
	The potential is already there, but I believe that realising it will require a new drive to bring in the sector from the cold. That depends, first, on the Government providing fair rules and fair funding. A good start has already been made, but Ministers recognise that there is more to do. Secondly, it depends on the sector—charities and voluntary organisations alike—putting its own house in order. Charitable organisations, just like private or public sector organisations, cannot expect to get something for nothing. The Parliamentary Secretary, my hon. Friend the Member for Doncaster, North (Edward Miliband) is quite right that, to get a better funding regime, charitable organisations need to demonstrate the added value that they can bring to our key public services. They need to be clearer about what they are promising and what they can deliver and they need to get tough about the value of their work, not just its cost.
	Thirdly, charitable organisations need a system of regulation and law that allows them to demonstrate that they are fit for purpose as they broaden their role and provide more services. That is where the Bill, in my view, becomes so important, but has a delicate balancing act to perform. On the one hand, it needs to assure the public that there is probity in the charitable sector as its role expands. On the other, it needs to avoid the temptation of over-prescription and burdensome regulation. It is worth recalling that, according to one survey at least, charities come second only to churches in the public's league table of trustworthy organisations. They have a trustworthy rating of 48 per cent. By contrast, Government have a rating of 6 per cent.

Bob Russell: As much as that?

Alan Milburn: For the hon. Gentleman's benefit, political parties have a rating of 1 per cent. I am not sure whether the Liberal Democrats score. The Joint Committee was especially keen to ensure that smaller charities did not find that their volunteers and necessarily limited resources were swamped by paperwork, more red tape or over-regulation. We took evidence from organisations that represent small charities and heard their concerns about that. We made a series of suggested changes to the draft Bill as a result. I am personally pleased that many of our recommendations have been taken on board in the Bill.

John Bercow: I am listening with great interest to the right hon. Gentleman's comments. There are great dangers in over-prescriptive regulation and we often complain about that, but I hope that he accepts that the flipside of the coin can be unduly ambiguous legislation and that the Government would want to avoid that, too. Earlier, the hon. Member for High Peak (Tom Levitt) spoke powerfully about independent schools sharing facilities, to the public benefit, and how that might be viewed as a criterion for retaining charitable status. I do not object to that—it is perfectly sensible. Does the right hon. Gentleman agree that another way forward might be to say that, if those independent schools can prove that they provide permanent access to people from low socio-economic groups, it might also be proof of their public benefit?

Alan Milburn: The hon. Gentleman makes an interesting and telling point. I received an interesting letter from the Independent Schools Council, which, as many hon. Members know, represents the vast majority of private schools and charitable private schools.

Helen Goodman: Public schools.

Alan Milburn: Yes. It is confusing—the schools are public but they are private. When I say private, I mean public. I hope that that has clarified the point.
	Jonathan Shepherd of the Independent Schools Council gave evidence before the Joint Committee and he made an interesting point in a letter to me dated 22 June. He referred to the presumption that the hon. Member for Isle of Wight defended: because an organisation is educational, it is automatically charitable. The letter stated:
	"The presumption has sheltered lazy charities because they did not have to demonstrate public benefit... The new Charity Commission checks will not allow charities to get away with being lazy or disengaged from society."
	The hon. Member for Buckingham (John Bercow) therefore makes a good point. Perhaps he could make it privately—or publicly—to the hon. Member for Isle of Wight.
	On regulation or deregulation, the charitable incorporated organisation, which is the new legal form for charities, to which my right hon. Friend the Minister referred, is genuinely deregulatory. It avoids the need for dual registration that most charities currently experience. Similarly, the advent of a legal appeals mechanism through the charity tribunal is an important antidote to the additional powers that the Bill gives the Charity Commission. I welcome the fact that the Government have agreed with the Committee's call for a review of the burden of regulation on charities. I believe that that review is now under way.
	It is slightly less welcome that the Joint Committee's recommendation that the Charity Commission should be required to use its powers proportionately, fairly and reasonably has been only partially incorporated in the Bill. As my right hon. Friend suggested, the word "proportionate" appears in the measure. However, "fairly" and "reasonably" do not. One out of three is not too bad but given the genuine concerns that were expressed in another place and the continuing need to reassure especially the smaller charities that they will not face some sort of Big Brother Charity Commission with extensive new powers at its disposal, I hope that my right hon. and hon. Friends might be able to go a little further.
	If the balance can be got right, regulation as proposed in the Bill can be a protection, not a distraction for charities. Part of the purpose of the Bill, the Committee was told by the Government, was to protect the charity brand. We heard evidence from elsewhere in the world—I remember in particular the evidence that we received from the United States of America—about how organisational and regulatory failure had combined in a succession of scandals affecting individual charities, such that the charity brand was contaminated and public confidence in charities severely dented. In that sense, charities face an especially tough accountability test. They rely ultimately on public giving, so they must be confident of public support. As we know, however, there is much public confusion about the most basic of facts: what qualifies to be a charity and what does not. There is a perception gap between what people think is, or at least should be, charitable and what is charitable according to the law. We know, for example, that 97 per cent. of people surveyed think that Oxfam is and deserves to be a charity. Only 15 per cent. of people think that Tate Modern—not too far from this place—is a charity. Fewer still think that Eton is a charity. Closing that perception gap is clearly important if charities are to enjoy continued public confidence.

Bob Russell: I apologise for my late arrival at the debate—I had other parliamentary commitments this afternoon. The right hon. Gentleman will recall that I served on the Committee under his chairmanship. I shall put the point to him now that I put in the Committee. Does he agree that were Eton to have a flag day, people might accept that it is a charity?

Alan Milburn: The hon. Gentleman might want to put that point to the provost of Eton rather than to me.
	The Bill's answer is to introduce a public benefit test, which all charities will have to pass in order to gain charitable status. Unlike the Conservative Front-Bench spokesman, I very much welcome the introduction of that test. We must concede, however, that it is by far the most controversial aspect of the Bill, particularly when it applies to private hospitals and private schools. It was certainly the issue that took up most time on the Joint Committee, with many different points of view represented, and it sparked sometimes fierce debates in the other place. The Committee concluded:
	"Since the purpose of the Bill, according to the Minister, is to protect the charity brand, it is important that any new law on charity must properly deal with the issue of public benefit."
	For some, this is deeply ideological terrain. There is antipathy in some quarters— even, I guess, among those on these Labour Benches—towards private education per se. That is not my starting point. For me, politics is not about taking things away from people, or levelling down, but about giving things to people—levelling up. That is why I support the proposition that we should have more choice, not less. It is also why I am a long-term advocate of partnerships between the public and private sectors. The widespread recognition nowadays that the old divide does nobody any good is welcome. In the national health service, for example, partnerships between public and private sectors are now commonplace and, for most patients, welcome.
	As the briefing that all Members received recently from the Independent Schools Council demonstrated, many enlightened private schools have made a great effort to open their doors to the wider community. Partnerships with state schools to teach minority subjects, to develop distance learning materials, to undertake summer schools and even to prepare pupils for university have been fostered. Therefore, we know that partnership can deliver the goods. The creation of both city academies and trust schools provides further opportunities to make partnerships between private and state schools even more meaningful and to help to bring an end to the educational apartheid that has in the view of many been so damaging to schooling in our country.
	Where private schools engage in such partnerships, they make a good case for providing genuine and direct benefit to the wider public. The argument that we heard on the Joint Committee that private schools deserve charitable status because they save the taxpayer money by educating children who would otherwise have to go to the local state school, however, is not helpful to their case. That is both a fallacious and deeply complacent argument. On the same basis, private gyms, I presume, might become charities, as it could be argued that they dampen demand for local authority facilities and so reduce the cost to the public purse.
	Charitable status should not be a given; it should have to be proven. While many private schools make their facilities available to state schools, the latest report by the Independent Schools Council—"Good Neighbours", published in 2003, which is about relationships between state and private schools—says that the majority do not, and that
	"absence of charitable status makes little difference to... a school's willingness to make its facilities available."
	When, according to the Independent Schools Council's own report, 48 per cent. of private schools that are charitable never make any of their facilities available to state schools, people are bound to ask what the public get back for the £100 million of public expenditure that such schools enjoy in tax benefit earned as a direct consequence of their charitable status. At present, only some can answer that question. In future, all will have to be able to answer it, because the Bill removes the automatic presumption that every educational venture is, by dint of being educational, also charitable. Instead, it introduces the much-decried public benefit test.
	Public expenditure is not, and cannot be, a free good. It rightly comes with strings attached: it must be a something-for-something deal—in this case, tax advantage in exchange for public benefit. I have no objection to that principle. Indeed, I think it is a principle that we should enshrine far more fairly than we do at present, and that applies as much to private charitable hospitals as to private schools.

Andrew Turner: Would the right hon. Gentleman apply that to any form of tax relief?

Alan Milburn: We are not discussing any form of tax relief, but leaving that aside, I think it no bad thing to ask what we are receiving in return for public expenditure. The hon. Gentleman may not think that it is public expenditure, but it could at least be described as public expenditure forgone. As he would be the first to say, it is not our money; it is the taxpayer's money. It just so happens that when we are in government, we are responsible for applying different purposes for the taxpayer's money. It seems to me a good principle that when people work hard to earn money and pay it into the Exchequer, we, as custodians of the public purse, should say "Here: this is what you get back." If the hon. Gentleman is inclined to say that that applies to some areas of public expenditure but not others, I think people are entitled to ask him why he thinks that a level playing field should not apply to all areas of public expenditure.

Andrew Mitchell: The right hon. Gentleman knows that that was the key point raised in the scrutiny Committee, and the point of greatest contention. Surely what we should be pointing out today is that after a great deal of discussion, some of it very heated, the entire Committee was able to camp on the position set out in our report, which the Government have endorsed. Will the right hon. Gentleman urge his right hon. and hon. Friends not to try to unpick a deal with which everyone can live?

Alan Milburn: I think that I have done quite a bit of urging already in my speech, but the hon. Gentleman is right: we had heated discussions, but we reached a consensus. I shall say more about that shortly.

David Taylor: In the "costs" column of the cost-benefit analysis applying to private schools, my right hon. Friend lists only the estimated cost of various tax reliefs. Should he not also have included an estimate of the cost of the damaging impact on local state schools of academically selective, socially divisive schools in the community that tend to cream off the most motivated and academic young people?

Alan Milburn: We addressed that point in questioning the various representatives of the private school sector who appeared before the Committee. I am not here to defend private schools or otherwise; what interests me is whether the public receive benefit in exchange for the expenditure that we make on their behalf. That is my fundamental concern.
	If properly applied, the public benefit test could drive forward partnerships between the private and the public sectors and, in particular, between private and state schools. I was very taken with the evidence to the Committee of one private school head teacher when he argued that the new public benefit test will accelerate the trend for the rest to follow the lead of the best. Indeed, the Independent Schools Council has welcomed the Bill and its general secretary, Mr. Jonathan Shephard, told the Joint Committee that he agreed with the proposition that the new test should be used as a lever to get more schools to provide more public benefit.
	And here we need to be certain that the Bill will do what it purports to do. On that count—notwithstanding strong differences of opinion on the question of the charitable status of individual schools and hospitals—the Joint Committee had grave concerns. Those concerns were accentuated by evidence from the Charity Commission that the public benefit test as defined in the draft Bill would have no impact on the charitable status of private schools or hospitals. That led us to conclude that
	"while a detailed statutory definition of public benefit would be too inflexible, nonetheless there is a need for a more explicit definition of public benefit in connection with the Bill."
	We went on to recommend that a set of principles should be included in the Bill or in Government guidance. New clause 4 requires the Charity Commission to issue such guidance which it has already helpfully drawn up in draft form.
	The challenge now for Ministers is to assure themselves and the House that the clause and the draft guidance are clear enough in setting the framework for the Charity Commission to guarantee public benefit; otherwise there is not much point in introducing a new test. In evidence to the Joint Committee, the Government told us that the public benefit test was intended to have teeth. Providing it bites, that test can guarantee that all charities—including private schools and private hospitals—do what only some currently do: provide public benefit that is direct not indirect, high not low, and meaningful rather than tokenistic. That after all is the direction of travel shared in common by all political parties, the Government, the opposition on the Joint Committee, charities, organisations representing charities, individual schools and the Independent Schools Council.
	Getting the public benefit test right is central to guaranteeing public confidence in what charities do. Charities do good. Few if any Members of Parliament or the public would disagree with that proposition. But in a world where accountability is tougher, scrutiny is greater, and the role that charities play is potentially wider, the assumption of good is simply not good enough. It has to be proved. I welcome the Bill because it provides a golden opportunity for charities to do just that. It will make a huge difference to the work of charities and the wider charitable and voluntary sector, and to each and every one of the communities that we represent.

Martin Horwood: I must declare some non-pecuniary interests, as a member of the Institute of Fundraising, a patron or friend of various local charities in Gloucestershire, and a trustee of the UK's leading blindness research charity, Fight for Sight. That is not the first plug we have had for a very worthwhile charity in this debate and I am sure that it will not be the last.
	I also welcome the new ministerial team and congratulate them on bringing this Bill before us after so long a wait. Credit is also due to the right hon. Member for Darlington (Mr. Milburn), my hon. Friend the Member for Colchester (Bob Russell) and the hon. Member for Sutton Coldfield (Mr. Mitchell), who contributed to the long periods of effective scrutiny and the welcome degree of consensus that has been achieved—at least, until today—although I cannot go along with the rather extreme penalties, such as beheading, that the right hon. Member appeared to recommend for some of the dissenters. In any event, I pay tribute to the Joint Committee's work.
	This Bill has been so long in preparation that I remember briefing voluntary sector colleagues on the new Charities Bill that I thought was to become law imminently long before I was even a candidate for Parliament, let alone an MP. Now that we are finally debating it in the Commons, I hope that with the help of a sufficiently brisk and efficient Committee stage, we might just see it complete its passage before the summer recess. There will certainly be groans of disappointment from my former colleagues if we allow it to be delayed by another three months. However, all credit to the ministerial team for having rescued it from the long grass at all.
	To extend the horticultural analogy, Ministers have entered an area of public policy that is like a huge garden, worth billions of pounds in income, as the Minister said, and which employs 600,000 people, according to the National Council for Voluntary Organisations. It is a garden in which Ministers are just visiting gardeners, and they would do well to tread carefully. The garden has diverse species of many colours and sizes. It has plants as different in size, function and characteristics as daisies and oak trees: from Cancer Research UK, with its £240 million income and huge marketing budget, to wonderful but hard-pressed charities in my constituency, such as Cheltenham Open Door and Cheltenham Community Projects; from democratic membership organisations with large volunteer bases to highly specialist trusts; and from charities that only sell Christmas cards to important service providers whose fees pay for the education, care and support of large numbers of the most vulnerable in our society. This Bill must look after the interests of them all.
	If left unattended, the garden will not wither—probably quite the reverse—but weeds will creep in, often looking pretty at first, but threatening the future reputation of the whole. However, if the garden is cultivated and nurtured, it will flourish, grow and produce enormous benefits for us all.
	With this Bill, the Government show every sign of not charging in with a mechanical digger, as they have in a few other areas of legislation and policy. The careful and consultative approach has brought them the overwhelming support of the voluntary sector, and I am pleased to say that the Bill continues to enjoy the full support of the Liberal Democrats, too.
	There are many benefits of a new Charities Bill. I highlighted them to my colleagues all those years ago, and I still commend them to the House today. They include many of the practical steps that the Minister outlined, which will make easier the roles of trustees, finance directors, company secretaries, and treasurers in particular. I am sure that those measures will be much appreciated.
	We all have delicate balances to strike between the voluntary foundation of the best charities and the professionalism demanded of them in today's risk-averse world, and between the need to regulate and avoid the misuse of publicly donated funds and the risk of over-burdensome red tape. Public opinion will punish us either way if we get those balances wrong.
	Public opinion is also a strong factor in the Bill's fundraising provisions, which we might have expected to be more contentious. However, I am pleased that the Institute of Fundraising fully supports them as proportionate and equitable. As a paid-up member still, I shall follow my institute's lead in the hope that the provisions do not impact unduly on the income of national charities or increase too much the bureaucracy with which they have to deal.
	I was a little upset by the Minister's reference to chugging. I do not know whether she knows this, but it is short for charity mugging. It is an insulting reference to hard-working paid and unpaid charity fundraisers, and I hope that she will avoid it in future.
	From fundraising to campaigning, the new heads of charity recognise among other things the importance of what might be called campaigning functions, such as the prevention as well as the relief of poverty, the advancement of human rights and the promotion of religious or racial harmony, equality and diversity. That is in line with previous Cabinet Office policy advice that charities should not keep the experience of their front-line work to themselves, but should be encouraged to share it with legislators and decision makers such as ourselves, and, where appropriate, campaign for change. It is right that we no longer ask charities to witness poverty, injustice, ill health or cruelty, but not to speak out about the fundamental causes of those ills.
	To put my point into new Labour-speak, the direction of travel is broadly good. However, I agree with the hon. Member for Stroud (Mr. Drew), who is no longer in the Chamber, that the Bill, perhaps out of necessity because it is not a Finance Bill, leaves out a big issue—VAT. The Minister was worried that including such a provision would mean a bill for half a billion pounds, but that is exactly the bill faced by charities at present because VAT is not recoverable. We cannot address that question in this debate but we might find a way of doing so in Committee, perhaps through the reporting measures proposed in part 4—no spending commitment implied.
	The new heads of charity will provide a level playing field as between the educational, religious and poverty charities, mentioned by the hon. Member for Isle of Wight (Mr. Turner), which did not previously have to pass a public benefit test under various Charities Acts, and the vast number of organisations that had to pass such a test. They range from St. John Ambulance, which saves lives in local communities, to Survival International, which works for the rights of tribal peoples around the world. It is right, as Lord Hodgson of Astley Abbotts said, that
	"all charities should have to meet a public benefit test, no matter what their purposes".—[ Official Report, House of Lords, 28 June 2005; Vol. 673, c. 154.]
	The question whether we should add clarification and guidance to the Bill's provisions on public benefit is already generating a lot of hot air outside this place. On the one hand, the Independent Schools Council is lobbying hard against any strengthening of the public benefit test, and schools such as Fettes college in Scotland are talking about the "politics of envy". On the other, a former aide to Cherie Booth, writing in  The Guardian this weekend, predicted "class war" headlines. So far, so unhelpful.
	Today, we witnessed the astonishing spectacle of the official Conservative spokesman setting out in the House of Commons an even more reactionary position than the one advocated by his noble Friends in another place. In effect, he argued for the insertion of a special status that would require a public benefit test of St. John Ambulance but not of Eton college. That is an astonishing position. I do not know whether the Leader of the Opposition is aware of what his hon. Friend is proposing, but it does not sound like the new model Conservative party to me.
	The Minister gave reassuring responses to various interventions about the bodies and organisations that would not be affected by the Bill's public benefit test, but as the right hon. Member for Darlington said, it would seem desirable that such brave new legislation should make some kind of difference to somebody in terms of the public benefit test. I shall, therefore, clarify the Liberal Democrat position, which has been consistent throughout the Bill's long history. Along with the NCVO and the Charity Commission in some of its guidance, we believe that the current public benefit test leaves the law in a muddle and that the Bill needs to be strengthened in that respect. I draw the attention of Members to the comments signed by Stuart Etherington of the NCVO, David Harker of Citizens Advice, Michael Lake of Help the Aged and John Low of the Royal National Institute for Deaf People. They say:
	"Clarity is vital if we are to secure a level playing field for all charities operating today and for others being formed. If the public believes access to a charity's services is unduly restricted because of high fees, or for any other reason, the case for charity will be undermined. We hope that MPs will support our call for clarity and put this vital question beyond doubt."
	The Bill does not yet do that.
	An interesting new law has been passed in Scotland. Adopting its terminology, which was supported by Labour and Liberal Democrat Ministers north of the border, would seem to have much to commend it, not least the obvious advantage of consistency. That is not compulsory, but it is clearly desirable for charities that operate both north and south of the border.
	The ISC is simultaneously lobbying against such clarification and advising its members on how to respond to the tightening of the law on public benefit. Its 2005 briefing on the subject stated:
	"Schools should, therefore, be fully prepared to demonstrate public benefit as early as possible, and not later than the autumn of 2007. ISC advice for the past year has consistently been that schools should audit the public benefit they provide, and should be prepared to think imaginatively of ways of extending public benefit."
	I could not put it better myself—exactly the outcome that Liberal Democrats seek.
	Today, I consulted Tim Hastie-Smith, the headmaster of Dean Close school, an independent school in my constituency, who told me that
	"schools are big money-making ventures whether they like it or not. How can we look the public in the face as charities unless we are doing things that are obviously charitable in their intent?"
	Before the Minister nods too much, I should tell her that Mr. Hastie-Smith told me that he supported strengthening the public benefit test and thought that Dean Close school had nothing to fear from it. I suspect that the hon. Member for Buckingham (John Bercow), who is also no longer in his place, might even support that, judging by the sentiment of his intervention.
	Having enjoyed Dean Close's excellent theatre facilities—not because I pay fees, but as the parent of a local four-year-old in a wonderful community-based dance production—I fully understand Mr. Hastie-Smith's confidence. He also cited the example of Christ's Hospital, which has the kind of endowment fund that the Charity Commission might rightly look twice at in any charity, but which has such a good record of charitable activity that it too would be at no risk from a reasonable public benefit test of the kind that we would support.

Hilary Armstrong: I support the way in which the people to whom the hon. Gentleman has been talking are speaking about public benefit. The issue is the means of getting there. There is much argument among lawyers about whether anything new would bring clarity to the whole sector or whether including something else in the Bill would bring further uncertainty, given that we are talking about something that, up until now, has largely been delivered by case law. That case law would have to be undone and we would have to start again. I wanted to assure him that we all will the ends; the question is, what are the right means to achieve those ends?

Martin Horwood: I am grateful to the Minister for that intervention. It bodes well for Committee, where we may be able to find constructive ways through the issue. Having said that, I am still puzzled by her comments. She says that she is going to use the precedent of existing law, which relies on case law, but the Charity Commission, in its current guidance, says that the law is confused and it has not been able to provide suitable clarity through regulations and guidance to satisfy organisations such as the National Council for Voluntary Organisations, the Royal National Institute for Deaf People and Help the Aged. I stick to my initial assumption that we need to follow that advice and provide more guidance in the Bill. I do not see why guidance in the Bill is so much more threatening than guidance provided elsewhere.

Hilary Armstrong: The Charity Commission goes on to say that it would have to be absolutely clear that any further—I cannot remember the exact words—deliberation did not bring with it unintended consequences. That is precisely what I am referring to. Clarity in one aspect may bring a lack of clarity in other aspects in terms of how the public benefit test was to apply to other charities.

Martin Horwood: Again, I am grateful to the Minister. I suspect that we may be citing different parts of what the Charity Commission has said. I was not citing guidance relating to the effects of the Bill; I was referring to guidance advising charities on whether there is clarity in the current situation, which there is not. I still support taking the opportunity to add clarity.
	In case there is any doubt about the effect that our amendments would have, or in case any party is thinking of caricaturing them as intending some kind of bonfire of charitable status, I should say that we will aim to table amendments in Committee that will make it absolutely clear that, just as fee-charging special schools or carers support charities should not be caught by a stiffer test, nor should independent educational establishments that follow the ISC's guidance on imaginatively seeking ways to increase their public benefit. As the first ever friend of the country's leading independent specialist college for disabled young people, the National Star college, based in and next to my constituency, I would be in trouble if I suggested any measure that threatened its charitable status.
	The last areas that I will touch on are the role and powers of the new improved Charity Commission established by the Bill and of its new overseer, the charity tribunal. I use this opportunity to restore a measure of consensus on this side of the House by supporting the comments of the hon. Member for Isle of Wight when he suggested the establishment of a suitors' fund to reduce the risk to charitable funds in approaching the charity tribunal. There is much to recommend that and I support it. Hon. Members should pay tribute to the outstanding individuals, such as Geraldine Peacock, who have led or served as charity commissioners, but we must also acknowledge the dissatisfaction with the practical results of the Charity Commission's action—and occasionally inaction—which has occasionally run high. I am afraid that I have my own examples of that from personal experience.
	While I was the director of fundraising of the Alzheimer's Society, a new charity called the Alzheimer's Foundation was set up. It was registered by the Charity Commission, but it had no background in Alzheimer's research, no volunteer or supporter base and no donor base. However, it suddenly started running an extremely large and—to us—threatening fundraising campaign through which it sought large amounts of public funds. It turned out that the charity had a close association with an American direct marketing agency. We believed that that agency loaned the trustees of the charity the money to establish the fundraising campaign, and that the donations that resulted from it were used to pay back the American agency. That was obviously good business for the American agency, but extremely poor value for the donors whose money had overwhelmingly been used to pay a business, rather than for Alzheimer's research, as they believed.
	At the time, we approached the Advertising Standards Authority, the Charity Commission and, on the side, the  Daily Mirror. The most useful of the three was the ASA, which came down on the organisation like a ton of bricks and stopped the misleading claims that it was making in the public arena. The  Daily Mirror was pretty useful, too, but I am afraid that the Charity Commission considered the matter for a long time before deciding that there was no problem. It was only when we approached the then Minister, the hon. Member for Slough (Fiona Mactaggart), and she took up the matter—I am grateful to her—that we miraculously got a result from the Charity Commission. There are thus weaknesses in the regulatory regime.
	While there is such disquiet about the role of the charity commissioners at present, the Government want to extend the number of charities to be registered, add a new status of charitable incorporated organisations, which will be regulated by the Charity Commission, rather than by Companies House, and add new powers and responsibilities to advise and guide charities. A Government who want to do that without suggesting how the organisation will cope with its expanded responsibilities are pretty brave. Each of those measures is welcome in itself, but nothing will damage faster the critically important public confidence and trust to which the Minister rightly referred than the creation of a regulatory regime that—however accidentally—turns out to be less effective than the one we have at present. We will have to pay careful attention to that matter in Committee, but it should not disturb the healthy cross-party consensus in support of such a worthwhile and long-overdue Bill.

Alun Michael: I welcome my right hon. Friend the Minister for the Cabinet Office to her new role. I also congratulate the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Doncaster, North (Edward Miliband), on becoming the first Minister with responsibility right across the third sector. I warn him that that is not only a big opportunity, but a big challenge. It is a pleasure to speak after my right hon. Friend the Member for Darlington (Mr. Milburn). I congratulate him on his contribution to both the scrutiny of the Bill and the general election campaign.
	I want to develop three points. First, we should celebrate the arrival of the Bill and engage keenly with the outstanding issues of detail, such as the meaning of "public benefit". Secondly, we should see the Bill in the context of the wider third sector of value-driven organisations. Thirdly, we should accept that there is no quick fix. The Bill should be seen as being about not the Government or Parliament laying down the law, but relationships in the sector, among sectors and between the Government and the third sector. Like all relationships, they will need hard work and a lot of give and take if they are to be successful, as has been illustrated during the debate.
	We should celebrate the Bill as a staging post in the Government's support for charities and the wider voluntary and community sector. It is worth recording, with some pride, that the Labour party has taken the sector seriously as a partner in a way in which no previous Government have done. The Prime Minister's interest goes back to his time as shadow Home Secretary, when he launched what became the leader's review of the relationship between Government and the voluntary sector. That culminated in "Building the Future Together", which was published in 1997, and the introduction of the compact arrangements. Those arrangements were themselves only the start of a journey that was stimulated by both the review, which I led, and the sector's own work, which was led by Professor Nicholas Deakin. Indeed, I welcome the development of compact plus as the next stage of the process.
	The Chancellor has always emphasised the importance of values. He introduced many improvements on the treatment and encouragement of charities. I am especially excited by the way in which he has built work on the role of the third sector in preparation for the forthcoming comprehensive spending review by both engaging the sectors in that work and creating connections across Whitehall. It is in that context that the long-awaited Bill, as several hon. Members have described it, is important.
	The lack of modern legislation on charities partly reflects a reasonable fear of getting things wrong. It also reflects the sensible judgment that the matter is not just for the Government and that a top-down approach will not work. However, a lot has happened in 404 years. The existing law is old and case law is too rare to cover all contemporary issues. There are thus matters that must be grasped by the Government and Parliament, and the need to modernise charity law is inescapable. However, that is a difficult matter with which to deal, as our debate has demonstrated, so introducing even such a carefully crafted Bill, which has emerged from long consultation, deliberation and scrutiny, must be seen as an act of courage by Ministers. The way in which my right hon. Friend the Minister for the Cabinet Office made her speech showed that she knows how courageous she is being.
	Although removing the presumption of charitable status in favour of the concept of public benefit is clearly greatly welcome and a sensible minimum step towards modernising the law, it is courageous. It is naive to think in the modern world that all education bodies, or bodies formed with religious aims or the aim of alleviating poverty, are automatically charitable and working in the public interest. However, we need to be clear about what we mean by the public interest test, which is a job for Parliament and, especially, the Committee to which I hope that the Bill will be committed. The last thing that we want is a tightly-worded definition that becomes a straitjacket, so the idea that the Charity Commission should work on the concept and consult widely is probably sensible, as long as we are clear about the general terms of reference for that work and the commission listens to parliamentarians, too.
	Our constituency work gives many of us a useful insight into the situation in addition to any expert knowledge or experience that we may have, as has been illustrated in our debate. However, my hesitation arises from a experience with the Charity Commission that is not too far removed from that of the hon. Member for Cheltenham (Martin Horwood). During the Thatcher era, the commission listened to people on the right wing of politics who suggested that charities should be banned from campaigning and seeking changes to the law or the policies of Government. The hon. Member for Isle of Wight (Mr. Turner) tried to portray those people's pernicious activity as being against illegal activity, but it was no such thing—it was outrageous. How can organisations such as the Alzheimer's Society, to which the hon. Member for Cheltenham referred, NCH, Mind, Age Concern or even a local citizen's advice bureau choose between providing a service to those whom they exist to help and arguing the case for those with no voice of their own? Those people were attempting to muzzle charities.
	Of course, charities should not undertake party politics, but charitable judgments are inevitably also political judgments. That is why so many of us came from community and voluntary action into political action and why we MPs generally know where the line needs to be drawn. On that occasion, the commissioner, to his credit, listened to cross-party concerns, and the subsequent guidance made it clear that charities could campaign, but that such campaigning had to be undertaken in the context of an organisation's charitable objectives. That guidance made all sorts of sense because it said that charities could campaign on the issues that they existed to promote.
	Another example of common sense is the list of 12 specific charitable purposes, plus a catch-all, that is set out in the Bill. Again, the matter has been sensitive. I especially welcome the inclusion of animal welfare on the list because it is something for which I have long argued. There is always a danger of the reactionary argument that animals are not part of the public, but the way in which we treat those with which we share the planet has long been recognised as an important measure of our humanity and is thus a proper charitable purpose. The inclusion of animal welfare puts that beyond doubt in respect of charities. They, like schools and like organisations that are concerned with saving life, will have to show how they deliver the public benefit. However, the Bill is about the vehicle for providing public benefit, so it is a mistake to get bogged down in political detail in respect of public schools or any other political issue.
	I hope that the Committee will grasp the issue of public benefit intelligently. Let us explore what those words mean and, from the debate on that, give clarity to the Charity Commission in developing the concept further, but let us also try to avoid being too prescriptive. The Scottish definition, which was mentioned by the hon. Member for Cheltenham, has some merit. It is a brave effort, but even it might turn out in the long term to be a straitjacket, and we must avoid such dangers, otherwise we will return to charitable legislation year after year, which would be a mistake.

Martin Horwood: I am grateful to the right hon. Gentleman, both for giving way and for comments he has made on matters about which we obviously agree, but I remain puzzled as to why including something such as the Scottish formula in the Bill would be any more prescriptive or confusing than having that in guidance from the Charity Commission.

Alun Michael: There are organisations, such as the National Council for Voluntary Organisations, that would like there to be something in the Bill but start to express concern as soon as a particular wording is looked at, including the Scottish wording. It is very difficult to change anything that is in primary legislation, but if there is a debate that looks into the concept of public benefit and develops the idea so that it is clear what Parliament means, and that idea is then developed further by the Charity Commission, we may be able to deliver the consensus that we all want, and to strengthen it.
	I am coming to the conclusion that there is no a quick fix in terms of the wording, although I am sure that we will all applaud if the right words are found. Indeed, my right hon. Friend the Minister for the Cabinet Office indicated that if there is perfect wording, she will welcome that. However, it will be the worst of all possible worlds if we get the wrong wording and we are then trapped by that and do not have the flexibility to develop.
	The other argument I would make is that the purpose of Government and Parliament must be to enable rather than to constrict. The issue under discussion affects not only the public sector and the responsibilities of Government, but the active engagement of citizens. We therefore need to be very careful, and the more flexible the definition, the better, provided that we all work on getting clarity and consensus in the delivery of the definition and what it means in practice.
	In its briefing to Members last week, the Charity Commission indicated its willingness to listen to the debate and to engage with parliamentarians as they get on with the development of the guidance to which the hon. Member for Cheltenham referred. I suspect that that would be a very constructive way to proceed—saying neither, "No, we are not interested," nor, that we must define too closely in law the nature of the public benefit test.
	Having, over the years, set up a number of bodies such as those under discussion, I very much welcome the ending of dual registration as a charity and as a company limited by guarantee. That has worked, but it is not logical and charitable incorporation completes a range of options, along with the community interest company, which I had the pleasure of bringing into effect last year, and models such as industrial and provident societies. That will make much more sense for social and charitable entrepreneurs in the future, because they will be able to choose the model that best suits what they want to do, rather than having to constrain artificially the nature of their organisation.
	As I said, my second point is to set this debate in the context of wider developments in the third sector. When I undertook the review of the Government's relationship with the sector, I often referred to the voluntary and community sector as a loose and baggy monster. That is the term that Henry James used to describe the novel, but in my mind, when applied to the voluntary sector, it describes a friendly, creative and dynamic creature, and it indicates the impossibility of neatly defining a sector that includes major grant-giving trusts, major service providers, quirky specialist organisations, universities, museums, many of the types of organisations that have been referred to in the debate, and a whole host of local and even neighbourhood organisations. Indeed, the scope and variety of the sector leads to many people extrapolating from contact with one or two charities and thinking that they know it all. In truth, none of us knows it all; we never can, and we never will.
	I suspect that that is a particular problem in Whitehall, where the language used is frequently wrong—and language does matter. All too often, the best intentions expressed in the wrong words give offence in a way that the speaker did not intend, as when John Major tried to woo the sector. The then Government did not spot that the "make a difference" initiative would immediately be reduced to an acronym by the machinery of government and become the "MAD initiative". However, I am talking about much deeper language, usage and meaning. To communicate, it is necessary to understand the language of the listeners and what is behind the terminology in question. That is a big challenge to Government, and I know that my hon. Friend the Parliamentary Secretary takes it very seriously.
	That challenge is even greater than before, as we now have a family of loose and baggy monsters. There is considerable engagement between the charitable and the wider voluntary and community sectors and the co-operative and mutual sector and the burgeoning social enterprise sector. The rapid development of that sector offers tremendous opportunities. Let us not forget that we are talking about businesses that have to achieve success in a competitive market, as well as to deliver in respect of the values on which they were established.
	These sectors overlap in places, and the variety and energy are great. There is also engagement with the activity of volunteering—something that I regard as the "essential act of citizenship", and which is not just a part of the voluntary sector but which contributes across the piece, including to the public sector. Indeed, it is important to realise that there is a link between these ideas, the development of the wider third sector of overlapping entities and the growth of corporate social responsibility—and even the ideas of enlightened shareholder value that we discussed recently in the Chamber in relation to the Company Law Reform Bill.
	So in looking at the role of charities in the wider third sector, I warmly welcome three developments in particular. The first is the engagement between these sectors, in order to agree what they have in common and to develop a capacity to speak to Government with a single voice when appropriate. I stress the words "when appropriate" because such varied sectors have widely varied interests and agreeing where to agree cannot be allowed to be a substitute for a whole plethora of contacts and engagements with both national Government and local government across the whole piece. Having said that, the Third Sector Network's statement of principles is enormously important in that it provides a position statement that is necessary for dialogue with Government and sets out the importance of independence, and the focus on social justice, diversity, dignity and respect and on issues such as participation and empowerment—again, a theme stressed by the Prime Minister only last week.
	I will not go through the whole document, but it is important to recognise that sustainability is important and that accountability—a word that has come up time and again—is to wider humanity and to enduring values, rather than merely to the Government of the day. I hope to continue to play a part in nurturing a dialogue on this—I have had the privilege of taking part in some discussions—because it is good for all parts of the sector in question and good for Government that such discussion takes place. I pay tribute to the NCVO for nurturing the process, and to all the other players for coming to the table.
	Secondly, it is in this context that I earlier welcomed the Chancellor's initiative. Given the considerable overlap between different parts of the third sector and that the one thing they have in common is that they are driven by values, and given that the way that the Government treat them is often very significant, it is surely right to nurture a dialogue in pursuit of a level playing field where people can pursue their values through a business model or a charitable model, or an association or a partnership, or even through a company model as with the new community interest company.
	Thirdly, the Prime Minister's speech last week broke with tradition by starting a dialogue with both the wide third sector and business—together, and at the same time—on the nature and future of public service delivery. That really is joined-up thinking. I worry a little that some parts of Whitehall see the third sector merely as a vehicle for public service delivery. The sector does have a role in service delivery, and there is scope both for the sector to play a bigger role and for the sector itself to grow. But that is not the sector's whole job and, in the case of many existing organisations, it is not "what they're there for". The Government must be sensitive to those differences, too.
	I point back to the Thatcher era when the then Government failed to attract the private sector into the provision of social housing. In a panic, they sought instead to use the housing associations as a vehicle; that was like the friendly grip of a hungry boa constrictor. Many small organisations had to choose between very fast expansion, linked to a radical change in their ethos, or going out of existence altogether. Many were forced into being poor property developers and large-scale property managers, and lost their way. Later, many in the sector did find the way to combine values with that expanded role—it is now a mature and effective sector in its own right—but at the time, it was a case study for how government should not do things.
	By contrast, new vehicles that are created and designed for a specific purpose can use the experience of charities in the third sector, while meeting the aspirations of government. We are seeing that with foundation hospitals, which have embraced principles of co-operation and community ownership. I pay tribute to my right hon. Friend the Member for Darlington for not only seeing, but seizing, that opportunity when he was Secretary of State for Health. I hope that the same will happen with trust schools, and in other fields such as regeneration and crime reduction.
	My point is that if the Government want to offer new roles to the sector, it is vital to do so through a partnership approach from the very beginning of policy development, and certainly at the design and delivery stages. Charities might be able to take on such roles in their existing form—some of the bigger ones certainly can—but in other cases, it might be a question of working with the sector to create new types of vehicle, and of being sensitive to those differences. Ministers need to recognise that this might take time, and officials need to be encouraged to develop the capacity for partnership working. Shortcuts do not work: they are damaging to both sides and lead to tears. Just producing a policy document does not create a relationship. Capacity has to be built, and relationships have to be worked at. Policies have to reflect relationships, rather than setting down requirements.
	This can be done and it can add value, but it is hard work and the relevant Government Departments have to work in new ways. Indeed, Ministers and officials have to be empowered to work in ways that break the mould, just as happened in the early days of the social exclusion unit, for example. Such things do happen in government, but for the future, they have to become the norm.
	In many ways, I have already presented the evidence for my third point, on which I shall be extremely brief. I just want to warn the Government and Parliament—and certainly the Opposition—that this is always going to be hard work. Does Whitehall yet speak the language? I doubt it, and I share the concerns expressed by John Cridland of the CBI at last week's conference. Supporting the charitable sector is not about paying lip service to motherhood and apple pie; rather, it is about hard work, engagement and dialogue. Indeed, it is more like the reality of motherhood and the job of baking an apple pie.
	Most charities exist because individuals have invested in them an extraordinary amount of personal time, energy and creativity. Rarely has that happened because someone planned and costed the job in advance and calculated that it will work. Mature organisations do become more calculating—they use business techniques—and hurrah for that. But most third-sector organisations and certainly most charities—at national and local level—can trace their history to somebody who was like a bumble bee. Nobody told the bumble bee that, technically, it cannot fly, so it does. Charitable endeavour has always been about saying, "Something must be done", and then setting out to achieve the impossible. That is why charity has to be nurtured, encouraged and believed in and its integrity protected. That is why the Government have been right to hasten slowly with this Bill, and to make sure that it is the right legislation for our times and for many years to come. That is why we must give it a warm welcome and debate the detail with great care, as well as with enthusiasm.

Andrew Mitchell: I am most grateful to be allowed to speak in this debate this afternoon, in view of Mr. Speaker's ruling that members of the shadow Cabinet may not "moonlight", so to speak, on issues from the Back Benches. I should explain to the House that I sat on the Joint Committee of both Houses set up to scrutinise this Bill in draft, and it is on that basis that I have sought to catch your eye this afternoon, Mr. Deputy Speaker.
	Many Members in all parts of the House believe that the pre-legislative scrutiny process needs to be strengthened and used to a far greater extent, and the Joint Committee, which was chaired so ably by the right hon. Member for Darlington (Mr. Milburn), did a service to the House in terms of the quality of such scrutiny. I am, of course, referring—as he did—to the staff of the House who staffed that Committee and to the many experts who appeared before us, but also to the great expertise of the other place, which, in contributing to that Committee, underlined the advantage of the non-elected principle. I hope and believe that our Committee performed a very useful task, and some of that benefit is on display in today's debate.
	As I said, the right hon. Member for Darlington did a really excellent job in chairing the Joint Committee. He tried to put some minor distance between himself and the conclusions reached, on the ground that he went off to another—rather less laudable—job, but he missed only one meeting and his spirit certainly brooded as we reached our conclusions. He kept us facing in the right direction, and it is perfectly clear that he is ideally suited to being the next deputy leader of the Labour party. He knows that I have some modest experience of leadership elections—on the losing side, admittedly—but if there is anything that the Opposition can do to help him, he has only to pick up the telephone.
	On the Government's reaction to our Committee's work, which is enshrined in the Bill, I congratulate them on accepting most of our recommendations. They deserve about seven and a half out of ten for their efforts today and I hope that, if they listen fair-mindedly to what has already been said in this debate and in another place, they will have done even better by the time that we reach Third Reading.
	Given that this entire process was set in motion by the Prime Minister's own strategy unit and progressed through a Joint Committee of both Houses, I was surprised to learn that the Government seem to have ignored a number of that Committee's recommendations, particularly bearing it in mind that it was chaired by the right hon. Member for Darlington—a senior and well-respected former Cabinet Minister, Blairite and close confidante of No. 10. Perhaps the Government need to hear again today some of the arguments that they appear to have rejected.
	The recommendations left out of the Bill that the Government have yet to see fit to include are relevant to both the charity sector and the British public, who are so generous with their support through donations not only of money, but of time and expertise. One of the most important points that our work on the Joint Committee reinforced was that Britain does have a charitable sector of which we should all be really proud. We have heard today from the Minister that there are more than 160,000 main charities on the Charity Commission's register. That figure is growing by almost 2,000 a year, and that is not the only upward trend. Between 1998 and 2000, for example, employment in the charitable sector grew by almost 7 per cent., which is a faster rate than in both the public and private sectors. In 2005, the total annual income was almost £38 billion—equivalent to more than £600 for every man, woman and child in the UK.
	However, people in Britain are as generous with their time as they are with their hard-earned cash. Home Office figures show that in 2003, more than 20 million people were involved in some kind of volunteering in the community, half of whom were involved in formal volunteering more frequently than once a month. Some 3 million volunteers do work for one or more registered charities, and such work is equal to 1.5 million whole-time equivalent jobs. It was estimated in 2000 that the value of unpaid work to charities was more than £15 billion a year.
	Baroness Scotland has stated:
	"The Government's three aims for the Bill remain. The first is to provide a legal and regulatory environment that will enable all charities, however they work, to realise their potential as a force for good in society. Secondly, we want to encourage a vibrant and diverse sector, independent of government. Thirdly, we want to sustain high levels of public confidence in charities through effective regulation."—[ Official Report, House of Lords, 7 June 2005; Vol. 672, c. 783.]
	Those aims have been affirmed by the Minister today. However, the Joint Committee had some serious concerns that have not been addressed. The first was that smaller charities should not be overburdened with regulation, but should be encouraged in a climate that promotes philanthropy. Secondly, the independence of the Charity Commission and the charities sector should not be compromised. Thirdly, the new definitions of charities and the removal of the presumption of public benefit should not hit private schools, hospitals and religious groups the hardest. Last, but certainly not least, the Committee was concerned about the ludicrous proposal that excepted charity status should be abolished for armed services mess and sports' non-public funds—a proposal that should be removed in its entirety from the Bill. It is the rejection of certain of the Joint Committee's key recommendations covering those points that could prevent the Government from achieving all their stated and laudable aims.
	I shall deal first with the independence of the charities sector generally. Among charities and the general public alike, there is growing disquiet that in Lord Dahrendorf's words, the third sector has
	"become a semi-government sector of public life".—[ Official Report, House of Lords, 20 January 2005; Vol. 668, c. 938.]
	In his interesting speech, the right hon. Member for Darlington spoke of the importance of partnership between government and the charitable sector, and it is the importance of getting that balance right that I wish to flag up. There is a degree of ambivalence—on the one hand, the voluntary and charitable sector has an enviable record of providing outstanding care, but on the other, we are talking of a desire to see a thriving, independent charitable sector, which should not be dominated, fettered and generally taken over by the state. The Cabinet Office paper, "Private Action, Public Benefit" clearly defined the Government's objective as one of ever closer union, aiming to
	"enable the sector to become a more active partner with Government in shaping policy and delivery."
	That was the burden of the right hon. Gentleman's comments. The Charity Commission, however, has made it quite clear that that approach is not a panacea. It warns:
	"Increased co-operation increases charities' reliance upon the State for funding and, in turn, creates a potential risk to charities' independence."
	Such a loss of independence, the commission says, could lead to bodies being
	"created with a stated purpose that is charitable, but with an unstated purpose that is concerned with giving effect to the wishes and policies of a governmental authority."
	The Charity Commission concludes:
	"It would be difficult to avoid the conclusion that a body of that kind was not really a charity at all. Instead of being set up for the stated charitable purpose, it would exist in fact for the purpose of securing the benefits of charitable status while carrying out the wishes and policies of the governmental authority."
	In fact, there are already 731 charities that have a local authority as a trustee. More worrying is the fact that for 595 of them, the local authority is the sole trustee. In response to that, one of the most important of our unanimous recommendations was in relation to the independence of the Charity Commission and the provision that it should exercise its powers
	"on behalf of the Crown"—
	an arcane form of words that means that the Charity Commission would be closely bound in to the Government, ministerial diktat and departmental governance. In the light of the Government's stated objective to encourage
	"a vibrant and diverse sector, independent of government"—[ Official Report, House of Lords, 7 June 2005; Vol. 672, c. 783.]—
	it is incomprehensible that the Government have, as yet, failed to remove what was clause 4(1) of the draft Bill, which proposed that the Charity Commission would perform its functions
	"on behalf of the Crown."
	With that clause in place, the commission will continue to be, in effect, a Government Department, albeit a non-ministerial one. That means that it cannot appear to be fully independent of government. Witnesses before the Joint Committee warned of the risk of greater political interference and of prejudice to the commission's quasi-judicial functions—I draw the House's attention to paragraph 177 of the report. The Government's rejection of our recommendation does not adequately answer those concerns. As if to add insult to injury, the Government failed to adopt the Joint Committee's recommendation that the Charity Commission be more accountable to Parliament and its Committees and declined to give statutory force to a requirement for the commission to report to either House.
	A number of witnesses from whom the Committee took evidence expressed grave misgivings about the effect of such a proposal on the credibility of the Charity Commission. For example, in its evidence to the Joint Committee on the draft Bill, the Charity Law Association stated that if the commission
	"is a Government Department, then it is likely to lessen, rather than increase, public confidence in charities. It will be seen as susceptible to being used by the Government to further its own policies."
	It is important that the commission be accountable to Parliament rather than to the Crown. The National Council for Voluntary Organisations went even further, arguing that it was not enough for the Bill simply to stipulate that the commission be answerable to Parliament, but that it must give at least some outline of how the mechanism of that accountability should operate in practice.
	Parliament would need to enforce regular and detailed monitoring of the financial well-being and the regulatory effectiveness of the Charity Commission. Speaking from my experience on the Joint Committee, I hope that the Home Affairs Committee will take up the recommendation that it hold an annual evidence session with the Charity Commission. I also hope that there can be a debate every year, in Government time, on the annual report of the Charity Commission in both Houses, as the Joint Committee suggested.
	My next point is on the introduction of a blanket public benefit test. At present, if an organisation's purposes lie within the three named heads of charitable purpose—the relief of poverty, the advancement of religion and the advancement of education—it is presumed to be acting in the public benefit, unless a positive reason for doubt is presented. In the Bill, it is proposed to change that presumption, requiring all bodies to show that they are acting in the public benefit, as defined in law, before they are granted charitable status. The reversal of the presumption of public benefit will primarily impact on private schools and hospitals and religious groups, which previously came under the three headings of the preamble to the legislation about which the right hon. Member for Darlington spoke so eloquently, but which now, as the House knows, must prove a public benefit.
	Although the Bill does nothing to override existing case law, so it will not change the definition of public benefit itself—it is inevitable that the requirement to demonstrate public benefit will make it harder both to register as a charity and to remain as such. Moreover, the nature of the legislative requirements will mean that charities will be subjected to ongoing public benefit checks. Inevitably, the smaller charities, which are the least able to deal with that sort of regulation in terms of both manpower and expertise, will bear the brunt of the legislation.
	Ultimately, everything will turn on how the Charity Commission operates the public benefit test. One of the most valuable contributions that the Joint Committee was able to make, and where it had a positive effect on clarifying the thinking within the Home Office and the Charity Commission, was in causing them to produce what I believe we called a concordat on how that part of the legislation will be operated. However, that is no guarantee that the change to the public benefit test will not produce uncertainty and turbulence to educational and medical bodies, whose activities have long been regarded as for the public benefit.
	None the less, I urge the Government to stick to what has been agreed and what is in the Bill and to ignore the old Labour class warriors chuntering on the Government Back Benches and revving up to amend the Bill in that respect. Let us hope that the new arrangement will work out as most of us believe it should. In that sentiment, I have no doubt that I have the full support of the right hon. Member for Darlington.
	Lastly, I wish to join Lord Craig of Radley in his outrage at the intention to abolish excepted charity status for armed services mess charities. An excepted charity, as authorised by a 1965 statutory instrument, has no obligation to register with the Charity Commission, although it must still meet the requirements of the Charities Act 1993. The real concern must be that, in due course, the threshold for registration will be reduced from a turnover of £100,000, and that more and more small armed forces charities will be required to register and to come under the closer regulation of the Charity Commission.
	Excepted charities that choose not to register with the commission do not have to submit accounts, prepare and transmit annual reports, or complete annual returns. The rationale behind this reduced regulation is that excepted charities, such as the armed services charities, are those that are under the control of another body acting in a regulatory capacity. There are about 15,000 armed services funds, which are charities. They are spread across the three armed forces. Their purposes range from officers and sergeants' mess accounts to service, sporting and recreational activities. A defining characteristic of such funds is that they derive their income not from the public, but exclusively from military personnel.
	Ministers have assured the Grand Committee in the other place that those funds will not lose their charitable status. On Report, a Government amendment has included in the list of charitable purposes the promotion of efficiency in the armed forces of the Crown. However, that does not change the fact that an entirely superfluous bureaucratic burden will be added. It will be superfluous because the funds are more than adequately supervised by the Adjutant General—far more so, I might add, than by the Charity Commission, which in the past has failed to satisfy the Public Accounts Committee and the National Audit Office. It caused the Joint Committee to express doubts as to its ability to meet the demands of the proposed wider remit. The commission has some way to go, and I sincerely hope that it will do so compellingly to demonstrate clearly, in today's parlance, that it is fit for purpose.
	The points that I have raised are minor but extremely important. They could make the Bill even better if they were included in the measure. I hope that the Government will reconsider them in the terms in which I have put them, and consider seriously including them in the Bill in Committee or on Report.
	I end where the right hon. Member for Darlington, the Chairman of the Joint Committee, ended his speech, in saying that the Bill is long overdue. It will make a tremendous contribution to updating charity law. It will help to ensure that the brand is protected and enhanced. There are tremendous opportunities, working with the charitable sector, to advance the objectives that we all hold within society. I hope that the Government will consider what I have said on these minor points to see whether the Bill can be made yet better.

David Lepper: First, I place on record that I am a trustee of a small local charity, Ardis, that is based in Brighton and Hove. It works on behalf of people with dementia in that area. I am also a member of the Association of Town Centre Management. The reason for that declaration might become clear when I say that I wish to concentrate my remarks on part 3, and particularly on street collections. Despite the comments of the hon. Member for Cheltenham (Martin Horwood), I have no hesitation in referring to the street collectors as chuggers—charity muggers. That is because of the outrageous activities of some paid street collectors in my constituency.
	I am talking of those who are paid on behalf of charities to stop people in the street and to encourage them, on the spur of the moment, to sign up to regular direct debit payments to extremely worthy charities. I question whether that is the best way to encourage people to make thoughtful donations regularly to a charity. Perhaps payroll giving might be a better form of making donations. Nevertheless, a number of charities use the street collector method.
	When the Bill was in draft form, I think that the Government took the view that the problems caused by street collections could be dealt with by self-regulation. I welcome the terms of the Bill generally, as have others, and as debate on the Bill in draft form and in another place has continued, I am glad that there are now to be two stages of regulation in terms of collections. Those stages will not, it seems, harm in the least local charities that collect by holding the tin and not shaking it, or from time to time shaking it, but I hope that regulation will help to curb the chuggers.
	The two stages involve the charity obtaining a certificate from the charity commissioners, followed by a form of local authority licensing. I gather that the Government's proposal is to talk with local government representatives and councils about guidelines for the licensing system. Alongside that, a self-regulatory code of fundraising practice will be developed. That is all good, but when it comes to discussing the guidelines I hope that those involved will bear in mind the local experience in Brighton city centre, in my constituency. I am sceptical about the self-regulatory approach on the basis of that local experience.
	I shall quote from a letter about chuggers—I could quote from others—from one of my constituents, which was written in September 2005. It reads:
	"The sheer rudeness of these people is breathtaking...the money...would be better spent on helping those who the charity is trying to help"
	rather than on paying the collectors. It continues:
	"People should have the right to go about their business without being insulted for not being able to afford to give a monthly donation to charity."
	That, unfortunately, is not an unusual experience that I have had reported to me by one of my constituents. Others have told me of similar stories.
	Local traders have contacted me, particularly about the North Laine area of Brighton, where there are quite narrow streets and many small shops and businesses. Day after day and week after week, many charity collectors gather there. They stand close together and they block shop doorways. It is obvious from what is reported to proprietors that those collectors are intimidating potential customers. Sometimes they are offensive to those who ask them to move on.
	All that has happened despite attempts to negotiate a local code with the help of the Public Fund-Raisers Regulatory Association. I have raised with that association issues that have been discussed at meetings of the all-party group on charities and voluntary organisations, and there have been failed attempts with the association to sort out a local code of practice.
	On 16 March last year I presented a petition that was signed by 200 people, which states:
	"The Petitioners...declare that the Public Fund-Raisers Regulatory Association agreed to amend the voluntary code of practice in order to address traders' concerns...The Petitioners declare that operatives"—
	the collectors—
	"are ignoring the amendments"—
	that is to the code of practice—
	"as well as the standard requirements of the voluntary code of practice".
	That was the experience after attempts to resolve those issues voluntarily. I spoke to the chief executive of the Brighton and Hove business forum, Tony Mernagh, only last week to ascertain the position now. He wrote in a letter of 22 June:
	"Chuggers continue to be as much of a problem as they ever were. Our attempts to control the nuisance factor by a voluntary agreement did not work. The PFRA were not prepared to agree to some of our requests and were half-hearted about asking their members to abide by the voluntary code and the vast majority do not."
	Tony Mernagh attached an 11-point code, most of which is based on a national voluntary code with some local amendments, a code which, he told me, is still, by and large, being flouted.
	For those reasons I have no hesitation, despite the comments of the hon. Member for Cheltenham, in referring to many street collectors as charity muggers. Far too many chuggers have been operating in my constituency and I hope that the proposals that are before us will help to regulate an unacceptable situation. When it comes to Ministers or officials working with local councils or local council representatives on guidelines for a licensing system, I hope that local experience will be considered. From what I read in newspapers, the experience in my constituency is not perhaps unusual because similar complaints are made elsewhere. As I have said, I hope that local experience will be taken into account when drawing up the guidelines to allow local authorities, in issuing licences, to have genuine powers to control the location and the frequency of collections and the numbers of collectors involved.
	I finish by repeating my earlier recommendation: people should think seriously about whether a spur-of-the-moment decision in the street to sign up to a regular donation to a charity is the best way to make such a donation. Payroll giving is surely a far better alternative.

James Duddridge: I fully support what the hon. Member for Brighton, Pavilion (David Lepper) said about chugging. While I cannot claim to have been a chugger, I have certainly been a shaker, and I am concerned that, according to my hon. Friend the Member for Isle of Wight (Mr. Turner), I acted illegally. Having encouraged other shaking in Rochford and Southend, East, I hope that I did not fall foul of the Government and will not be arrested on my return to my constituency.
	Joking apart, my hon. Friend said that it is sometimes important to make a small difference. From the outset, may I say that I support the Bill, and welcome the changes to trusteeships that make it easier for people to contribute as trustees? However, following my intervention on the Minister, I am concerned that people with learning disabilities cannot contribute as trustees. Like a number of Members on both sides of the House, I offer my constituents, particularly organised groups, the opportunity to visit the House of Commons and, a few weeks ago, I was pleased to receive a visit from the SHIELDS—supporting, helping, informing everyone with learning disabilities in Southend—parliament, which is a group of people with learning disabilities who have been directly elected as councillors to act as an advocacy group in Southend and, more widely, to represent the interests of people with learning disabilities. Last week, it adopted a constitution, but it was distressing for people who had been elected by their peer group to discover that they could not make a contribution as trustees. In fact, they were lumped into a single group with people with general mental incapacity. While those councillors have serious social problems, collectively they are a bright bunch and have a huge contribution to make. It is therefore deeply unfair that they should be thrown together with people who, under the Charities Act 1993, are convicted of offences including dishonesty and deception or who have become bankrupt.
	The SHIELDS parliament has got round the problem by using a provision in the constitution to appoint trustees. It states:
	"The Trustees have added responsibilities to safeguard the charity in order to benefit the Learning Disabled population of Southend, and to further the objects of the charity by facilitating their legal and moral wishes."
	Critically, it continues:
	"The wishes of the Learning Disabled population of Southend will be gathered by the Shields Parliament and communicated to the Trustees via elected parliamentary councillors."
	The SHIELDS councillors, who cannot act as trustees, have asked several members of the community, including me, to become trustees, and I should certainly like to do so, and urge people in Southend to support those directly elected representatives. It would be much better, however, if the councillors could be trustees themselves.
	The SHIELDS parliament and its facilitators have worked closely with the Charity Commission, so it is unacceptable that they should have had to resort to a rather cack-handed way round the problem, as mandating trustees to gather views via elected councillors is hardly the ideal solution. I therefore urge the Minister to take the opportunity offered in chapter 9 of part 2 of the Bill to table Government amendments or accept cross-party amendments to allow people with learning disabilities who can make a contribution to become trustees, particularly, but not exclusively, of charities that work with people with learning disabilities. I accept that a trustee organisation with a critical mass of people with learning disabilities is slightly more challenging from a legal perspective than general groupings, but both groupings are extremely important.
	Having made my main point, may I touch on other subjects? I am concerned about the removal of the presumption of public benefit, as it constitutes an attack on schools with charitable status. Members have talked about the direction of travel which, I believe, should encompass foundation hospitals, greater choice in education, and trust schools, and should lead us to the conclusion that more schools, not fewer, should have charitable status. I am concerned, too, about mega-charities that conduct large-scale operations. One cannot look through the appointments section of the big papers without finding jobs with attached salaries that, in some cases, are as large as that of the Deputy Prime Minister. I am concerned, not about the impact of professionalisation on charities' output, but about that career path, which is detached from reality.
	Unlike the right hon. Member for Cardiff, South and Penarth (Alun Michael), who is no longer in the Chamber, I remain concerned about the involvement of charities in political and campaigning activities. I do not wish to mount a general attack on charities, but I am reluctant, or certainly less willing, to give money to organisations such as Oxfam that do good work in Africa, where I have worked, and Christian Aid, because they have been involved in political activities or things that I perceive as political activities. Guidance would create greater confidence in what the Minister described as the charities brand.
	I have raised a number of subjects, but the one on which I should like the Parliamentary Secretary to dwell is the question of trusteeships for people with learning disabilities—I would be more than happy to meet him with a delegation to discuss the issue. The SHIELDS parliament, which is a very good organisation, believes that it is unique—I suspect that there are other such organisations, but they have not been brought together—and it has made a good proposal. With the Minister's help in the Bill, perhaps we can improve its representation.

John Grogan: It is a great pleasure to follow the hon. Member for Rochford and Southend, East (James Duddridge), who made a measured speech which, while based on local experience, had national implications on which we should all reflect. The highlight of our debate, however, was the moment when my right hon. Friend the Member for Darlington (Mr. Milburn), at the end of a long and thoughtful speech, asked Ministers to satisfy themselves that the public benefit test, as applied by the Bill, will make a difference. In my brief and modest remarks, I should like to ask whether Ministers have satisfied themselves that it will be a rigorous test of public benefit.
	The hon. Member for Sutton Coldfield (Mr. Mitchell) characterised some Labour Members as old-fashioned class warriors. I do not look at myself that way: I am a Yorkshireman who does not believe in "summat for nowt", and I think that all institutions that benefit from the public purse should justify themselves. Representing one of the United Kingdom's more rural constituencies, I like to think that I have my ear to the ground of middle England. When organisations such as the National Council for Voluntary Organisations, the Royal National Institute of the Blind and Age Concern ask for further clarification in the Bill, I sit up and take notice, and that is what I seek from Ministers.
	We have a dream team on the Front Bench. It is a great pity that the Minister for the Cabinet Office is not in the Chamber, as she gave me a great deal of good career advice when she was Chief Whip. Her talent for tact and diplomacy is known throughout the House, as is her closeness to No. 10, and those qualities will be important in securing the passage of the Bill. To complement her strengths, we are lucky to have a rising star in the Parliamentary Secretary, who is close to the Chancellor, speaks about the renewal of the Labour project and, indeed, social democracy, and has demonstrated great intellect in his interventions. I hope to persuade that dream team to just go a little further and ask the questions that my right hon. Friend the Member for Darlington asked.
	I refer to the voice of middle England and what the Charity Commission is saying about the Bill. I attended the same briefing that my right hon. Friend the Member for Cardiff, South and Penarth (Alun Michael) attended last week. I noted carefully the words of Andrew Hind, the chief executive of the regulator. He said that there was a worrying lack of clarity in the underlying case law. He certainly did not want inflexible wording in terms of a definition of public benefit in the Bill, but he said that he would like clarification, possibly in the Bill, about the application of this test.
	We have all seen the press release from the National Council for Voluntary Organisations and the words of its chief executive, Stuart Etherington. The NCVO says that, at present, the Bill extends the public benefit test to all charities on the basis of existing case law. However, it goes on, for charities that charge high fees for their services, this means that they will have to show only that the less well off are "not entirely excluded". This does not go far enough. Anyone able to benefit from a charity service must have a reasonable chance of doing so, says the NCVO. Stuart Etherington is quoted as saying:
	"Charities have long recognised the need to update charity law, and have pressed for this important legislation. The Charities Bill must protect and promote the charity 'brand', by making it clear that only those organisations that benefit the public can be charities."
	We have had a number of suggestions as to how the application of the public benefit test could be clarified in the Bill. The example from Scotland was given, and there are other examples. The noble Lord Phillips in the other place made a suggestion. I do not think that the fact that Scotland has passed one law and we may be about to pass another one can be entirely dismissed. For example, if, to take a completely random example, Fettes in Scotland was ruled not to be worthy of charitable status in Scotland under one regime, could it then apply in England under another regime, and perhaps up ship, and so on? One of the phrases that keeps coming up in many of these amendments concerns charges not being "unduly restrictive". That has some merit and should be considered by Ministers. After all, the alternative is simply to rely on case law. My right hon. Friend the Member for Darlington, whom I feel very close to on this issue, said that he did not think that it was a sufficient defence for, shall we say, private schools to claim public benefit just on the ground that they saved money from the public purse. But when one considers the only major case in this area in the last 40 years, one can draw precisely that conclusion—that public schools would have that defence. In 1967 the case of Re:Resch, concerning a private hospital run by nuns in Australia, was appealed to the Privy Council. Lord Wilberforce, in giving the judgment upholding the charitable status of the hospital, said:
	"It would be a wrong conclusion...to state that a trust for the provision of medical facilities would necessarily fail to be charitable merely because by reason of expense they could only be made use of by persons of some means".
	In other words, the level of charges did not matter. He goes on to justify that by saying that the judgment
	"results from the relief to the beds and the medical staff of the general hospital"—
	in other words, the saving from the public purse. Therefore, I urge Ministers that, if we are to meet the test set by my right hon. Friend, that the Bill should make a difference, we need to heed the words of the Charity Commission and the NCVO, not old-style class warriors, and look for further clarification in the Bill.
	My right hon. Friend and the Joint Committee went much further in one of their musings than I would choose to do and said:
	"Nonetheless we believe that the Government should consider reviewing the charitable status of independent schools and hospitals with a view to considering whether the best long term solution might lie in those organisations ceasing to be charities but receiving favourable tax treatment in exchange for clear demonstration of quantified public benefits."
	I would not go that far, but I urge Ministers to look at the question of the application of the public benefit test.
	Perhaps my right hon. Friend was reacting to some of the evidence before the Committee. A former public school headmaster, Dr. Anthony Seldon, said:
	"There are two very different kinds of independent school."
	I think that he is right. There are what he characterised as the small minority: what my right hon. Friend referred to as up to 50 per cent. of private schools, according to figures from the Independent Schools Council. Dr. Seldon referred to
	"the small minority which are very wealthy which are doing extremely nicely...and which...I do not think are very innovative. They look after themselves and they pay lip service to odd charitable things, but they are a self-perpetuating oligarchy and...they have great wealth, and I think they should be doing much more".
	That is the voice of someone with knowledge of the private sector.
	We are talking about £100 million of public money. We are talking about giving 80 per cent. relief on uniform business rates; tax relief on bank deposits and income from investments; the ability to claim back tax paid by benefactors; and exemption from VAT payments on fees—not inconsiderable matters. This test should be a rigorous test.
	There are two possible scenarios. I hope that my neighbour, my hon. Friend the Parliamentary Secretary, will listen to the debate and the moderate voices of the NCVO, the Charity Commission and his many friends on the Labour Back Benches who wish him well in his future career, and consider adding to the Bill with regard to the application of public benefit. If he does that, he could create a progressive consensus in the House. Not only those on the Government Benches, but in this instance at least the Liberal Democrats may well be part of that progressive consensus, and we could be faced with a Conservative party which, remarkably today, is to the right of the Independent Schools Council in that it insists that the public benefit test should not apply to private schools. That is a remarkable position. I do not think that the right hon. Member for Witney (Mr. Cameron) has noticed this, and that position may well change by Third Reading. Even so, I think that the Conservative Opposition would oppose such an amendment. Such a progressive consensus could be created. The alternative is probably for an amendment in line with the wishes of NCVO and the Charity Commission to be moved, perhaps from the Government or the Liberal Democrat Benches. Then we would have the unedifying spectacle of those on the Government Benches being divided on the issue. If the renewal of the Government was one of my central concerns, I know which of those two political scenarios I would be aiming for.

Tom Levitt: It is always a pleasure to follow my hon. Friend the Member for Selby (Mr. Grogan). We have many interests in common; unfortunately, class war is not one of them, so I will return later to see where we disagree on the issue of public benefit.
	I rise as the chair of the all-party group on the community and voluntary sector, a Home Office-appointed chair of the Community Development Foundation, and a former trustee of a major national charity, to welcome the Bill, which has had more than its fair share of scrutiny over quite a long time, as a number of hon. Members have said. But it is a little rich to hear protestations from Opposition Members about the time that the Bill has taken. They will recall that before the 2005 general election, the Bill was one of those that the Opposition was asked to co-operate with in order to give it a fair wind to complete its parliamentary stages before that election, on the ground that it was relatively uncontroversial. They declined, and that was their right as an Opposition, but that meant that the process had to start again. That is why it is now some six years since the strategy unit report was commissioned to consider the relationship with the voluntary sector in its wider sense. That is why it has taken six years for us to reach this point. Clearly, we are now approaching the end of the process, and I am sure that we will come out with a Bill that we will all be pleased to work with and see implemented.
	As my right hon. Friend the Member for Darlington (Mr. Milburn) has said—I think that I have read the same report as him—the public strongly support the work of the voluntary sector. For example, 88 per cent. of people believe that charities are well managed and spend their funds wisely, while 84 per cent. of people claim that they have implicit trust in the activities of the best known charities.
	The public misunderstand some aspects of the sector. My right hon. Friend the Member for Darlington has referred to the statistic that while 97 per cent. of people know that Oxfam is a charity, only 15 per cent. of people know that Tate Modern is a charity. The Charity Commission report also states that 90 per cent. of people say that they have received no assistance or advice from a charity, although 75 per cent. of them actually have received assistance or advice. I suspect that that is because people have received what they regard as professional and sound advice, which they do not believe could come from a charity.

John Gummer: In discussing the public perception of charities, does the hon. Gentleman agree that there will always be some charities which do very good work in unpopular circumstances? Examples include charities that work with certain categories of prisoner and small religious groups of which we may not approve but which contribute in their own way. It is important to recognise that the charity field covers unpopular areas as well as popular areas.

Tom Levitt: The right hon. Gentleman is absolutely right, which is why it is important that there are organisations such as the Big Lottery Fund to make objective decisions rather than simply giving the most money to, for example, the organisation that gets the most votes on a television programme. There has to be public input, but equally funds must be distributed rationally and objectively. Those who are in receipt of services provided by the voluntary sector are impressed by its work, and it enjoys very high levels of esteem and confidence.
	I have one slight reservation about the title of the Bill, because I had hoped that we could move on from the word "charity" and deal with issues in terms of the wider sector. I have come across elderly constituents in High Peak who have told me that they are aware of pension credit but will not claim it, despite being in poverty, because "I don't want charity." There is still the Victorian idea of charity being a handout rather than a leg-up, but charities and voluntary sector organisations enhance people's capacity to deal with their own lives and give people a leg-up rather than a handout.
	Communities in which the voluntary sector is healthy are themselves healthy communities, and we can judge how healthy and effective a community is by the activities of the voluntary sector within it. I shall provide three examples of how different voluntary sector organisations in my constituency have changed in the past 10 years.
	Ten years ago, I was on the management committee of my local citizens advice bureau, a modest organisation in Buxton which delivered advice and which was known for being well meaning. However, access was limited, and the advice was made available to those who knew where the CAB was, who knew how to access it and who could understand the advice when it was given. That organisation has changed in the past 10 years: it is still a voluntary organisation and its principal function is still to provide advice through highly trained volunteers, but it has a professional local leadership, a professional way of working, two fully equipped offices and a sub-office and a contract with the Legal Services Commission to deliver legal aid. It is a much bigger organisation than it was, and many of the volunteers have developed specialist areas in which they advise their clients.
	The information and advice provided by Citizens Advice can be accessed by us all through its excellent website, so one does not have to go to an office. It has done something tremendous in my constituency: in partnership with the PCT, it provides a volunteer adviser once a week in every GP surgery in the rural area in my constituency, which has led to some £2 million in previously unclaimed benefits going into people's pockets in the past two years. Those people are getting their entitlement because a voluntary organisation dedicated to the public benefit has delivered, which is why I was upset when the Conservative and Liberal High Peak borough council decided to freeze its funding for the CAB this year. It took people like me—I swam 100 lengths of Buxton swimming pool to raise £1,700—to make sure that my local CAB was not in deficit this year.
	My second example concerns the council for voluntary service in High Peak, which did not exist 10 years ago—my constituency comprises 650 sq m of territory where 75,000 adults live, but there was no co-ordinating body for the voluntary sector. Nowadays, the council for voluntary service is a professionally led organisation which is the main source of advice for voluntary organisations. It provides physical resources, such as office facilities and meeting facilities, and access to funding, and it is an incredible source of training for people who are setting up their own voluntary sector organisations and charities or working in their communities. Through the council for voluntary service, the voluntary sector is well represented on the local strategic partnership between local authorities and other service providers in my area. The council for voluntary service provides an invaluable service, and it has the respect of other public services with which it works to provide rounded, comprehensive, holistic and personally focused services. It is a wonderful example of the sector flourishing and helping people by delivering a public benefit, and I wish that more local strategic partnerships around the country treated the voluntary sector with the importance that it receives in my constituency.
	My third example of a local organisation concerns the Nepal Children's Trust. My constituency does not stretch as far as Nepal, but before I visited that country a few weeks ago, I was contacted by the trust, which began with four ladies in the New Mills area in my constituency. One of those ladies went on holiday to Nepal, where she saw the problems that children were having in one of the world's poorest countries and decided to do something about it. She has built up a network of a few dozen people around the country who not only engage in fundraising, but go over to Nepal to make sure that schools are built, that the children of prisoners get the support that they need and that children's human rights are upheld. The trust is doing excellent work, and it is a lovely example of how a group of people with a conscience and a sense of purpose can set up their own charitable organisation and make a difference.
	All those organisations will welcome the Bill—for example, if the children's trust is one of the smaller organisations, it will no longer be required to register. The organisations that I have mentioned are a long way from the traditional image of charities, which was, if hon. Ladies will forgive me, of members of the blue rinse brigade with their collecting boxes. In the past, too many of those people saw volunteering as an end in itself. Volunteering is a vital part of the way in which a community operates, but it is not an end in itself—there must be a purpose. One organisation—I could name it but I will not—was asked to deliver a different service that was better for its recipients, but withdrew from it because the volunteers did not like change.
	We can see the same changes happening on a national level. For example, Leonard Cheshire now delivers most of its services on contract to local authorities. Its residential homes are no longer the independent organisations that they were. It is providing an essential part of delivering care but at the same time ensuring that its users are much more closely involved in the delivery of services, and the shape and nature of those services. It has become a membership organisation in order to become more accountable. The Royal National Institute for Deaf People has also taken that step. More than one Member has mentioned its tremendous pioneering work—at a time when I was one of its trustees, although I take no credit for it—in joining up as partners with the Department of Health and delivering a £100 million programme to bring in digital hearing aids on the NHS for the first time. It was able to do that because of its professional approach and because of the economies of scale involved. It was able to use its power and size to get the best possible financial deal on the purchase of those hearing aids, which, as my right hon. Friend the Member for Darlington said, have made a real difference to the lives of millions of people.
	Another national example is that of last year's Make Poverty History operation, which involved the coming together of a huge coalition of groups, some of which have their priorities in far-distant countries and work according to their consciences on behalf of people around the world who are worse off than ourselves. Many groups have taken on that initiative and made it into a practical commitment. Two towns in my constituency are on the verge of acquiring Fair Trade status. They have achieved that because over the past few years voluntary organisations have grown up and worked with local authorities, caterers and all sorts of other organisations to build a coalition of voluntary sector, private sector and public sector interests that are backing the Fair Trade cause. The initiative was created by the voluntary sector in a way that will produce long-term benefit for us all.
	I was fascinated to read in today's newspapers about the largest ever donation to charity. A 75-year-old American gentleman by the name of Warren Buffett has just given more than three quarters of his $44 billion fortune—about $35 billion—to the Bill Gates Foundation, which is, according to  The Times,
	"the world's largest philanthropic organisation"
	and which
	"funds the international fight against diseases such as malaria, Aids and tuberculosis."
	Mr. Buffett justified his actions thus:
	"What can be more logical, in whatever you want done, than finding someone better equipped than you are to do it? That is how I feel about this decision about my money."
	Any donation of that nature sets an excellent example—it does not have to involve billions of dollars, which most of do not have.

Martin Horwood: I thank the hon. Gentleman for sharing with us the breadth of his expertise in the voluntary sector. He is right to draw attention to the principle that Warren Buffett has so generously espoused. Does he agree that it might even apply to much smaller charities, which are often registered by the Charity Commission but which might in some circumstances be better off as fundraisers for larger and better established charities, as they have fewer overheads and administrative burdens?

Tom Levitt: The hon. Gentleman makes a good point. I am sure that for some small charities that is the right way to go, although I would not include the Nepal Children's Trust, which was delivering on a very specific aim. However, this debate is not about telling the voluntary sector what to do but about giving it its head and finding out what works. They may well coalesce, by a process of organic growth, into being fundraisers for larger bodies as the most practical way of achieving what they set out to do, but that is for them to discover for themselves.
	There was a time when we could talk about the public sector, the private sector and the voluntary sector as three points of a triangle, but today they are three points on a circle, with every sort of organisation in between. In any ward in the constituency of any hon. Member here tonight, we will probably see a plethora of voluntary sector organisations. In one of my local wards, an active residents' association elects representatives to the arm's length management organisation that looks after their social housing. We would also find housing associations, the neighbourhood watch, various sports groups, older people's groups, local history groups, and guides and scouts. Tomorrow, I will be pleased to welcome the retiring commissioner of the Pennine guides as my guest at the older volunteer of the year awards, here in the House.
	The University of the Third Age is a huge organisation in my constituency. We also have the furniture project. This weekend, I asked the people at that organisation whether it was still a charity—a voluntary organisation—or had become a social enterprise. It collects second-hand furniture and trains people to repair and build furniture and to recycle furnishing materials. It is an accredited training organisation and a not-for-profit company, and in just a few years it has earned the title of a social enterprise. We will find community transport and volunteer car schemes, branches of large organisations such as Amnesty International and Friends of the Earth, and groups such as the one that I spoke to this morning—the local domestic abuse reduction partnership. All those organisations are dedicated to the public benefit of improving the communities in which they work.
	That is not to mention the trade unions, which represent public benefit in the workplace, and political parties. If those of us in political parties are not here in order to promote the public benefit, then what are we here for? Although it is not a matter for this debate, I hope that we will seriously consider the possibility of casting political parties in the same mould as voluntary sector organisations and charities as regards their treatment for tax purposes. That would be one way of stimulating a healthy democracy.
	The issue that took up much of the time in the Lords, as it has today, is that of public benefit. I am pleased that the Bill tightens the definition of public benefit, not least by abolishing the presumption that certain organisations automatically qualify for charitable status because they are involved in education, for example. Nevertheless, it is important that we allow for the necessary flexibility and do not tie ourselves down by agreeing on a definition that tries to anticipate all future examples of where public benefit may or may not be demonstrated.
	Many charitable organisations have commercial arms. An educational charity should not be banned from having a commercial arm attached to it, as long as the public benefit can be demonstrated by the charitable part of the organisation. I feel the same as some of my Back-Bench colleagues about the ethos of independent and fee-paying private education. I believe that the best way of ensuring that we have no need for it is to make the state sector so good that people will not want to pay. However, it is a fact of life that such schools and institutions exist. Some of them are special schools providing services that are not provided in the state sector. Those organisations should not have their credibility drawn into question when the public are paying those fees through sending children to use their facilities.
	As I mentioned in an earlier intervention, we are now seeing a growing tendency of independent schools to make their facilities—their drama halls, sports equipment, field study facilities—and their time, in the sense of sixth-form preparation, pre-university courses and so forth, available to state sector schools that have not been fortunate enough to provide the same facilities. I believe that those are good partnerships. Schools in the state sector do not receive any benefit from some teachers who were trained in that sector, so let us build a relationship with those teachers, even though they are working in the independent sector. If facilities benefit only some children, let us make them available to all children by developing partnerships with independent schools. I do not believe that a provision to deprive independent schools of only 4.5 per cent. of their total income will be for the wider public benefit when we can already see the tendency for more of their facilities being made available to more children— [Interruption.] I note that my hon. Friend the Member for Selby (Mr. Grogan) is itching to intervene.

John Grogan: I thank my hon. Friend for giving way, but does he accept that an amendment to deal with unduly restrictive charges would not require the removal of charitable status from all public schools, but only that they justify such status? Any schools carrying out the magnificent things that my hon. Friend describes would clearly pass the test, but why should those refusing to share any facilities or to offer any bursaries necessarily be given charitable status?

Tom Levitt: I am confident that the latter sort of school that my hon. Friend describes would not be able to demonstrate any public benefit, so it would not be entitled to charitable status, but I hope that the Bill will encourage schools to go down the former route and make their facilities and bursaries available.
	I should like to put a few questions to Ministers on the issue of fundraising and its regulation. It is claimed that the Bill will reduce the burden of legislation and bureaucracy on local authorities, but it seems to me that it does so partly by increasing the burden on the Charity Commission through the issuing and administration of public collection certificates, which have to be renewed every five years—a task currently carried out by local authorities. Of course it makes sense for a national organisation to have a national public collection certificate, once it has been granted, but the question remains whether the Charity Commission has the capacity to deal with it and, secondly, whether it is really removes all the burdens from local authorities. The question of when a street collection takes place would have to be administered by the local authority, as, presumably, would enforcement of the regulations pertaining to public collection certificates. Co-ordination remains the local authority role and the issuing of permits for street collections could be just as burdensome on local authorities as it is now.
	I was initially concerned that the legislation did not establish the imperative need for those involved in door-to-door collections to carry appropriate identity cards, but I now believe that it does. It is very important to reassure people on the doorstep that the person they are talking to is who they say they are and working on behalf of the organisation for which they are collecting. Members do not need me to explain that any further.
	The need for ID cards is established in clause 63, but who ensures that the people have the correct identity cards, adopting the correct style and containing the correct information? Who ensures that the identity is somehow authenticated? I cannot believe that it is a job for the Charity Commission to ensure that every identity card is produced in the correct way, so I presume that it remains an inspection role for the local authority to carry out. In view of such concerns about door-to-door collections, safety and the possibilities for crime or abuse, it is important for us to seek some reassurances in Committee.
	To conclude, every Member has his or her own knowledge of the value of the charitable and voluntary sector in their constituencies. They know that the sector can see what is wrong with service delivery and feed back on it. The sector is capable of some smashing examples of innovation and it can be less bureaucratic than the public sector, while certainly personalising services more effectively. In many ways, it can provide a better quality of service, if that is what is needed. We look to the sector to be a voice—not necessarily the only voice, but a voice—of public service users. We look to the sector to be a partner—not a junior partner, but an equal partner—in delivering those services and we see it as a viable and respected sector in its own right.
	As a Government, we need to build real partnerships with the charitable and voluntary sector. We need to strengthen the compact and commit ourselves, for example, to longer-term funding streams and full-cost recovery in all dealings with the sector. The Bill provides the framework to liberate the sector, to elevate it and to empower it. It deserves our support and I am sure that it will receive it.

Celia Barlow: A charity is an organisation that serves the public good and an institution that benefits people. Apart from the very necessary legal and regulatory questions, we should ask ourselves today how we can ensure that our charities can best function in the interest of those people. That is what I would like to speak about today.
	Charities can serve many purposes, and one of this admirable Bill's main accomplishments is that clause 2 gives a clear statutory definition of charitable causes, thereby updating the law. One purpose can be, as mentioned in subsection (2), providing relief to the elderly and saving lives. I would like to refer to one recent example from my Hove constituency of the closure of a care home that was owned by a charitable trust. It provides a telling example of a local charity not acting in the interests of its immediate beneficiaries and we will see how the problem could be rectified by the Bill and what questions still remain.
	Before I come to that, however, I would like to say that I welcome the Bill, as many Members have today. It was a Labour Party manifesto commitment at the last general election to provide a new, modern framework for the voluntary sector in order to promote charities and give them better legal guidance. The present regulations for charities are indeed outdated. As my right hon. Friend the Member for Darlington (Mr. Milburn) pointed out, our courts still have to rely on the Charitable Uses Act 1601, passed under the first Queen Elizabeth, to determine what a charitable purpose is.
	It is also a great step forward that we now get a clear definition that a charity has to work for the public benefit, rather than relying on the old circular reasoning that an organisation pursuing charitable purposes must be a charity. The new public benefit test will remind all charities that they need to demonstrate their usefulness to the public on a constant basis. However, as my hon. Friend the Member for Selby (Mr. Grogan) said recently, we need to decide on a rigorous definition of public interest.
	In the light of recent experience in my constituency since the beginning of the year, I would like to highlight the reform of the Charity Commission's powers. It is the first major shake-up since 1960, and I hope that it will take effect as soon as possible. Indeed, for some of my constituents, reform is already coming too late.
	Mr. Deputy Speaker, you may have read in the papers about the case of Dresden house, a care home for elderly gentlewomen in Hove. For many years, Dresden house was a very happy place for pensioners in Hove, a place where many members of my local communities wanted peacefully to spend their final years. It has been run as a charitable trust since 1910 and was highly praised in official reports. It was therefore a great shock to all the residents when, in January, the trustees suddenly announced that the home was to close and all residents were to move out in three months. Citing economic unsustainability as the reason for closure, the announcement left only 12 weeks for the elderly gentlewomen to find suitable alternative accommodation.
	Not only was the building destined to be closed but the many friendships built up over months and years by the residents in the community of Dresden house were about to be brought to an end. The trustees' decision was perceived by many residents and their relatives to be unnecessary as Dresden house continued to provide a high standard of care, with new residents being admitted to the premises as late as December 2005.
	Deeming the closure to be unnecessary, the residents' group contacted the Charity Commission for guidance, trying to find some facts about the decision to close. The group was headed by Nick Steadman, nephew of Dresden house resident Alice Pink, a 93-year-old gentlewoman who had previously worked as a nurse. I was introduced to Alice in January and came to admire greatly her resolve and strength of purpose. She had moved into Dresden house only in August 2005 and was looking forward to many happy, relaxing years in beautiful surroundings.
	The residents' group and my office wrote many letters to the Charity Commission. I talked to both the commission and the trustees. However, the Charity Commission replied that, under its current rules, it was unable to help in the matter. Despite my intervention, the trustees were unwilling to provide their residents with a clear reason for closure other than general financial circumstances, which could not be independently verified because the trustees were unwilling to disclose their accounts before the end of the financial year and there were no regulations to ensure that they did so. The financial year would expire after the last resident was required to leave the home.
	The residents' group offered themselves as trustees to oversee Dresden house, should the current trustees no longer wish to handle the responsibility of running such an institution. The trustees declined the offer. The Charity Commission had no powers to insist on its acceptance.
	Despite widespread support and sympathy, the trustees' decision to close could not be challenged under the existing definition of public benefit. At the beginning of March, the elderly residents of Dresden house had the trauma of moving to new premises. Alice Pink was the last resident to leave at the end of March. Failed by the institutions, she appeared to lose her energy and will to live after having to move elsewhere. Two months after leaving, she was found with a note by her bed, which read simply "I can't go on." She had taken an overdose of painkillers. One week later, she was dead. Another resident, 84-year-old Edna Henshall, died having suffered a stroke on the day she was due to move out. It is in their memory that I speak today. Dresden house now stands empty.
	The residents' group identified several points on which they felt that the system failed them. They felt let down by the Charity Commission's inability to direct trustees to comply on consultation and disclosure of financial papers. The new powers for the Charity Commission in chapters 1 and 5 to direct and advise charities proactively are therefore much needed, and the commission must use them effectively. The residents' representatives also complained about the Charity Commission's difficulties in influencing the composition of the board of trustees. The Bill will give the commission more powers to intervene.
	May I take the opportunity to throw my weight behind the request of the hon. Member for Rochford and Southend, East (James Duddridge), who is no longer in his place, to provide that people with learning disabilities can become trustees of charities of their choice?
	Chapter 2 deals with the creation of a charity tribunal and also constitutes a clear improvement in the law. As things stand, if a care home is council run, residents can bring a case under the Human Right Act 1998 with a reasonable chance of success. In the case of Dresden house, users and their representatives have had no effective redress, since the commission essentially has the final say. In my local case, the people affected felt severely let down by the absence of a strong authority to handle appeals about Charity Commission decisions.
	The new tribunal will give people the certainty that there is indeed an institution they can approach as a last resort. According to schedule 4, affected individuals will get a right of appeal. The relatives of the unfortunate former residents of Dresden house humbly request that the tribunal be given the ability to accept any disputed case for review, without exception.
	Charities are man-made institutions for the benefit of the people. In the other place, there has been some debate about whether the commission should have reasonable regard to the well-founded interests of the beneficiaries of the charity. Material assets are, of course, important but we should focus on the people involved—our most senior citizens in the case that I have outlined. The issue was debated on several occasions in the House of Lords. My noble Friend the Home Office Minister Baroness Scotland assured the Lords that, although the focus on people was not expressed in the text of the Bill, it was implied. On 28 June 2005, she said:
	"There is no doubt that the commission should take into account the interests of those affected by its actions. Two of the principles of best regulatory practice on the face of the Bill are that regulatory action should be 'accountable' and 'transparent', and these will involve the commission having regard to the interests of stakeholders."—[ Official Report, House of Lords, 28 June 2005; Vol. 673, c. 193.]
	I am willing to believe that that is the case but I press my right hon. Friend the Minister and my hon. Friend the Parliamentary Secretary to assure me that the interests of stakeholders will play a more central role in the commission's work. Will they ensure that, in its guidelines, there will be a clear undertaking to listen to the people who depend on charities?
	I do not claim that further cases such as Dresden house can be easily avoided by the Bill. However, I am sure that the clear guidelines that it provides will make it easier for the people affected to make their voices heard. I hope that the Government will ensure that the Bill stipulates that the Charity Commission and the charity tribunal will be the champions of the people who rely on them. We owe that to the many vulnerable people who depend on charities. We owe it to the elderly gentlewomen, formerly of Dresden house. It is in their honour and spirit that I support the Bill.

Mark Todd: I am glad to have caught your eye, Mr. Deputy Speaker.
	I noted in the early part of the debate the increased willingness shared by all parties to consider the transfer back to the voluntary sector of public services offered for the public good. I have long been a supporter of that since my time as leader of a city council in which we actively supported the voluntary sector through providing a variety of financial and common services, such as accountancy services—many voluntary organisations of all kinds greatly appreciated that. I therefore need no persuasion of the merits of that course of action.
	If one steps back 150 years or so, many services that we now take for granted were provided by voluntary—either charitable or mutual—means. There remains much to commend locally based mutual or other voluntary structures providing those services. It helps to create stronger mechanisms of community involvement in the services that people enjoy.
	Examples remain. Many hon. Members will have been lobbied about, for example, transferring air ambulance services to the public sector. I have surprised many of my constituents by saying that that may be an inappropriate approach. It is preferable to give better support to the existing, robust voluntary organisation, which provides the service. Simply adding it to the national health service is the wrong answer to the specific problems that the service may encounter.
	Let us consider the lifeboat service. Few would describe that as anything other than a vital service that is offered to part of our community. Yet no one would suggest that the state should provide it directly. We acknowledge that charitable and voluntary organisations can often provide major public services, not only smaller, locally based ones.
	Recent years have seen the modernisation of mutual and co-operative law, in which I played a small part. I see this Bill as a further step towards providing a modern framework. My right hon. Friend the Member for Cardiff, South and Penarth (Alun Michael) set out clearly the importance of choice in providing models of control and direction for social entrepreneurs. That is exactly what we should do. There are models that work in particular circumstances, and we should not be prescriptive. We should, however, have a modern set of laws that allow people to proceed with certainty. If we are to facilitate the increased use of mutual and charitable organisations to provide public services, however, we need not only to provide the certainty of law but to address how to regulate them. I listened carefully to those parts of the debate that dealt with the merits of a lighter touch, to which I will refer when I discuss a particular local example.
	Two aspects of the Bill are especially welcome. First, the emphasis on public benefit is absolutely right. I commend the Government's approach in that regard, and I am not that tempted to take a more prescriptive route. I may have the honour to serve on the Committee, and if I do, I shall listen carefully to the arguments for a more prescriptive approach. I will need some persuading, however, that a looser framework in which experience can be brought to bear might not be better. Secondly, the greater freedom to trade that charities will have is welcome and absolutely essential in the modern day.
	If we are to encourage the use of such models, however, we need to consider how their functions are to be regulated. The tools to be used must be proportionate to the purpose in which we are engaged. Normally, small charities would carry little risk. However, my experience indicates that a deliberately light touch can attract those wishing to pursue their own interests with minimal observation, to the extent of having no proper means of compelling even such basic methods of accountability as filing accounts and holding appropriate governance meetings. I shall return to that later.
	Running a small charity can also be a frustrating activity, and it is only human nature for some to feel inadequately rewarded for their efforts and to feel that perhaps there are other routes to enhance their circumstances in recognition of their efforts. Events in my constituency—I am sad to hear that I am far from the only Member to criticise the commission in this regard—suggest that the commission has only modest tools and rather less will to address those sorts of instincts. That has led me to suggest alternative models of control to those who are interested in establishing voluntary groups in my area. I am afraid that, because of my experience, I have not suggested that people use charitable vehicles for their purposes. Because of what I have seen, I prefer other, better regulated bodies to be used. That also led me to oppose vehemently leaving to the Charity Commission the regulation of trusts that might run individual or groups of state schools. I felt that that was a wholly inadequate approach to the regulation of trusts, and I was relieved that the Government conceded at the last minute that Ofsted would have a function of inspecting trusts as well as the schools for which they were responsible.
	I urge that further thought be given to how to identify risk of malpractice, even in relatively small charities. One approach that I commend is to insist on at least the basic provision—I do not demand audited accounts—of accounts of some kind. Another is to insist on all active charities holding appropriate governance meetings—which do not have to be frequent, but should at least be annual—to determine their continued activity and their officers. I shall press those and other arguments in the Committee if I have the honour to serve on it.

Gary Streeter: I am delighted to make a guest appearance, on a one-off basis—it is very charitable of me—on behalf of the shadow Department for Constitutional Affairs team. The tenor and tone of this debate, which is on a hugely important subject, has been constructive and good natured.
	We all agree that the Government are moving in the right direction, but the Opposition have the job of probing, pressing and improving law as it passes through the House. First and foremost, I commend the Government on moving slowly—not always by design, as the general election intervened—and on taking their time to consult and to try to get right a major reform of a law that, as several Members have said, has been in place since 1601, before the Act of Union. As we know, we had the draft Bill, which was subject to pre-legislative scrutiny—we heard a powerful contribution from the Chairman of the Joint Committee, to which I will return in a moment—and which completed most or all of its stages before falling at the general election. We then had the amended Bill, which was introduced and passed all its stages in another place. The Government are to be congratulated on listening at every stage and on improving the proposed legislation. Much progress has been made, and we look forward to more progress during the remaining weeks of the Bill's passage.
	The job is not yet done, however, as a number of serious concerns remain. It is worth alerting the House to the fact that though there is a wide consensus on the issue, this is not a Bill, if ever there were one, that we should nod through with our eyes half-closed. It is much too serious and important for that. There are a number of pitfalls that need to be avoided. The new Charity Commission will be a powerful institution that can set guidelines to determine which charities that currently enjoy the assumption of public interest will do so in future. We must remain alert to those hugely important new powers as the Bill moves through every remaining stage of its passage through the House.
	This is also an opportunity to place on the record the tremendous good that many charities do. As we know, and as many Members have recognised in the debate, society is not just about the state and the individual. There is a huge voluntary, charitable and faith sector in between, which exists to do good, fill the gap and stand in the breach. That is one subject on which all Members of Parliament are experts, as we have examples in our constituencies of unsung heroes—our favourite charities and organisations—who rush around serving other people. Even tonight, as we debate this Bill, countless thousands of people in this great country are going out and about serving other people simply because they want to make their lives better. Let us just imagine the gaping hole that there would be in our country if that activity did not happen. Those heroes deserve a legal and regulatory framework that lifts them up, imposes the minimum of regulation, provides the maximum clarity and regulates with a light touch. That will be one of our concerns as the Bill passes through the House.
	First and foremost, I appreciate the advent in the Bill of charitable incorporated organisation status. As someone who used to have a proper job as a corporate lawyer—

Mark Todd: Proper job?

Gary Streeter: Being a lawyer was a proper job, was it not? What did the hon. Gentleman do?
	I used to advise start-up businesses and charities on organisation as a company limited by shares, guarantee, trust and so on. Would it not be great to have one simple, cohesive and straightforward organisational structure that most new charities would adopt? That is a sensible suggestion, and I hope that it becomes fashionable and popular. I hope that investment and effort will be put into producing off-the-shelf templates, which small organisations can pick up to organise their businesses with little delay or cost.
	We heard some excellent speeches today. The Minister for the Cabinet Office introduced the Bill in a measured way, as befits legislation of this kind that has wide support. She gave a number of reassurances about how the public benefit test might apply to organisations already benefiting from the assumption of public interest. We must wait to see whether they pan out, but it was reassuring to hear of her belief—I paraphrase—that all, or almost all, independent schools, hospitals and religious organisations ought to pass the public benefit test. I invite the Minister to intervene if she wishes to clarify that.
	The Minister also said that each case would be considered and judged on its merits. I should like to hear from the Parliamentary Secretary, when he winds up the debate, how that process will work. We have talked about 190,000 charities. What is the time scale for a case-by-case assessment? It seems to me that it would be a huge job.
	My hon. Friend the Member for Isle of Wight (Mr. Turner) made a typically powerful speech. As is his shadow ministerial responsibility, he drew attention to some of the pitfalls that will have to be considered carefully in Committee. He spoke of the difficulties and costs that will be incurred by many existing charities on which will fall the onus of proof that they benefit the public. That process must be clarified. My hon. Friend called for a light touch in regulation, and for accountability. We do not oppose the public benefit test, but as Members in all parts of the House have said today, it represents a controversial and significant change. We are right to probe the Government to confirm that they have thought through the new system, and that it will be introduced with a measure of insight and wisdom.
	The right hon. Member for Darlington (Mr. Milburn)—who has not yet returned from what I am sure has been an enjoyable evening—chaired the Joint Committee, and the whole House owes him a debt of gratitude for the way in which he did so. He treated us to his experience of these matters. It might be said that he rolled out his progressive credentials at the same time, possibly with half an eye on the future, but we shall see what happens in that regard. He spoke of an opportunity for the charitable sector to offer high quality services and to embark on a real partnership with the private and public sectors. That is exactly what the Conservatives want.
	The hon. Member for Cheltenham (Martin Horwood), speaking for the Liberal Democrats, supported the Bill and brought to bear some specialist knowledge from his background, which informed and assisted debate. I think that he slightly misunderstood what my hon. Friend the Member for Isle of Wight had said, but we were treated to the good news that the Liberal Democrats had unveiled a new policy tonight—a policy of consistency. That is warmly welcomed by the whole House. The hon. Gentleman made important points about the need for clarity, especially in the Bill's definitions and the Charity Commission's guidelines. That was an important reminder, to which I shall return.
	The right hon. Member for Cardiff, South and Penarth (Alun Michael) also has great experience in this field. He spoke of the vibrant and important partnership between the Government and the voluntary and charitable sector. In giving the Bill a warm welcome, he recognised that removing the assumption of public benefit was a courageous step—taking our minds back, perhaps, to the great "Yes, Minister" programmes—but he said that it was the right thing to do, thus nailing his colours to the Government's mast. He called for clarity on the public benefit test—I think that the whole House wants the Parliamentary Secretary to deal with that important point—and said that the Charity Commission should listen to Parliament. That is crucial—Parliament has expressed itself very firmly, and we want the commission to listen to us. I am one of those who have said, on the basis of our experience in our constituencies and our former lives in the real world, that the commission has not always impressed people by the degree to which it listens and proceeds flexibly, without bureaucracy. We look for better performance in the future. The right hon. Gentleman advised his Front Bench not to be too prescriptive in its definitions, and spoke of the changing and diverse nature of today's voluntary and charitable sector.
	My hon. Friend the Member for Sutton Coldfield (Mr. Mitchell) spoke with great authority, having served on the Joint Committee. He gave the Government 7.5 out of 10—which was pretty charitable, for him—for listening to the Committee and incorporating some of its recommendations, to which I have already referred. The right hon. Member for Darlington has just returned. I know that he has been engaged in important business. As I was saying, my hon. Friend gave the Government 7.5 out of 10, but he hoped for a higher score as we approach Third Reading. He was particularly concerned about certain recommendations that were missing from the Bill in its current form—for instance, those stating that regulation should involve a light touch, that the independence of the charitable sector should not be compromised, that schools, hospitals and religious bodies should not bear the brunt of the removal of the assumption of public benefit, and about the recommendation relating to the removal of excepted status from armed services' mess charities. He urged the Government to ensure that those recommendations were incorporated during the Bill's passage.
	The hon. Member for Brighton, Pavilion (David Lepper) brought to bear his experience of town centre management in his thoughtful speech about charitable collectors—I did not know that they are often described as "chuggers"—and the undesirable and offputting nature of some of their activity. He expressed scepticism about self-regulation in that context. Given his experience, the House should take account of what he said, and we should give more thought to the matter in Committee.
	My hon. Friend the Member for Rochford and Southend, East (James Duddridge) expressed grave concern about access for people with learning disabilities to trusteeships of local organisations. The Parliamentary Secretary may be able to say something about that. My hon. Friend made his point powerfully and forcefully. He also expressed concern about large charities spending too much on salaries and political campaigning, and said that more guidance for some would make the public more confident.
	The hon. Member for Selby (Mr. Grogan) made one of his typically concise speeches. Indeed, it was so concise that I missed it when I nipped out briefly, but I know that he described his Front Bench as a dream team, which is an interesting concept. He also—importantly—called for the public benefit test to be tightened, an issue to which we will no doubt return in Committee.
	The hon. Member for High Peak (Tom Levitt), on the basis of his experience and background, described the tremendous contribution of a wide variety of charities in his constituency. He referred particularly to progress in recent years by, for instance, the council for voluntary service in his area. He illustrated the difficulty of regulating in the charitable sector by giving the example of a group of people who were moved by the plight of some children in Nepal, and set up a charity to do something about it. They stand alongside Oxfam, which has been doing such things for ever, and other great British charities. We have a single system that regulates all of them, and flexibility is very important. I am sure that the Minister took that on board.
	The hon. Member for Hove (Ms Barlow) made the important point that all that glisters is not gold. It is no good our thinking that all charities are wonderful and always make wise decisions. The House was moved and concerned to learn of the plight of the hon. Lady's constituents in Dresden house, about which she made some powerful points.
	The hon. Member for South Derbyshire (Mr. Todd) spoke warmly about the role of the voluntary sector. One of his important points was that it is not necessarily true that every voluntary organisation would benefit from joining the state sector. He mentioned the air ambulance service, which we also have in my part of the world. It is sometimes right for such services to be outside the state sector, but more clarity, support and guidance from that sector would sometimes be welcome.
	We had a good-natured and informative debate. I want to focus briefly on three issues. The end of the presumption of the public benefit test is controversial. It is a significant change for many organisations that have enjoyed that presumption for hundreds of years. We do not know what guidelines the Charity Commission will produce to help people decide what is and is not in the public interest. It has already produced some guiding principles, but it is quite capable of changing those. We do not know what the final guidelines will look like, so this is very much a step in the dark. It is imperative for the House to have as much information as possible about the nature of the guidelines according to which the industry will operate before the House makes its final decisions on Report and Third Reading. If there was a common theme on both sides of the House, it was the need for clarity and certainty, especially for well-established organisations that need to know what hurdles they have to jump to ensure that they are operating for the public benefit.

Martin Horwood: The hon. Gentleman describes the removal of the presumption of public benefit as controversial, but it was not, even among his noble Friends in the other place. Can he now confirm clearly that he is in favour of imposing a public benefit test on Help the Aged and the RSPCA, but not on Winchester and Eton?

Gary Streeter: The hon. Gentleman made that point earlier. It was not very good then and it is not very good now. I refute that facile intervention. We support the Bill and there will be no Division on it tonight. I am calling on the Minister to provide maximum clarity, especially in relation to the Charity Commission guidelines, on the system under which charitable organisations will operate once the Bill becomes law. The common cry from the House has been for clarity.
	Secondly, we are concerned about the independence of the new Charity Commission, which will be a powerful body. As other hon. Members have pointed out, its track record is not of the highest order. We agree that it should be independent of Government. I remember a thousand years ago, when I was a Minister in the Lord Chancellor's Department, we had a big public debate about whether legal aid should be granted in several high profile cases. I called in the chief executive of the Legal Aid Board and, flexing my muscles, said, "I want things to change." He looked at me and said, "You have no power over me whatever. Who on earth do you think you are? I will carry on doing as I have always done." In my opinion we have too many quangos that are not properly accountable. I know that it is fashionable to say that politicians should not make decisions and that we should delegate them to other organisations, but we have gone too far down that path and it is time to counter-attack and make many more of those organisations accountable to Ministers, who are accountable to Parliament. I may be a lone voice on that point, but that is how I feel. I feel a lot better now that I have got that off my chest.
	The new beefed-up Charity Commission will not be accountable to Ministers. I accept that it must be independent of Government, but our suggestion of making it accountable to a Select Committee is very sensible. I hope that the Minister will consider it carefully. All Members of Parliament inform themselves about the quality of charitable activity in their constituencies— we are experts in that—so it is a sensible suggestion. We are concerned about the current lack of independence and accountability of that organisation.
	Thirdly, we have heard much about partnership between the charitable sector and Government. Of course, that can work really well, but over the past few years we have seen that a charitable organisation may have tremendous success, because it performs its functions in its own way, but once it enters into a contract or relationship with the Government it slowly has the life squeezed out of it by red tape and bureaucracy. If that happens, the organisation can cease to be successful because of too much prescription by the Government. I place a marker to warn the voluntary sector and the Government that although we all want such partnerships, they must not lose the very aspects that make the organisations successful in the first place.
	Parts of the Bill will increase regulation and parts will reduce it. The Bill was an opportunity to set charities free, but it has not been properly seized. In particular, the £5,000 limit should be increased, and I hope that the Minister will consider that point. We want clarity on the public benefit test, greater accountability for the Charity Commission, and a light-touch, flexible regulatory regime that genuinely empowers, enables and supports the wonderful, unparalleled spirit of charity and compassion of the great British people to arise, shine and be even more productive in the future. We support the Government's direction of travel, but we will seek to improve the Bill in Committee.

Edward Miliband: It is a great privilege to wind up this debate. It has been an excellent debate with some thoughtful contributions from Members on both sides of the House, and we have seen the House of Commons at its best. A spirit of charity has abounded, not only in the praise for my right hon. Friend and myself from my hon. Friend the Member for Selby (Mr. Grogan), but in the offer by the hon. Member for Sutton Coldfield (Mr. Mitchell) to be the campaign manager for my right hon. Friend the Member for Darlington (Mr. Milburn) in any future election that might take place. The hon. Gentleman promised to do for my right hon. Friend what he did for the right hon. Member for Haltemprice and Howden (David Davis), so I am not sure how the offer will be regarded.
	As Members on both sides have said, it is more than 400 years since the 1601 preamble to the Charitable Uses Act. The Bill has been a long time coming, and that creates an added pressure to achieve consensus. Fortunately, the Bill gets it right. That is partly because it has been well prepared, having its origins in the 2002 strategy unit report; well scrutinised, thanks to the work by the Committee chaired by my right hon. Friend the Member for Darlington; and well debated, with 60 hours in the other place so far on two separate occasions. I look forward to the further deliberations in Committee.
	The central purpose of the Bill is to put in place a framework for charities and their activities that will enable them to realise their potential, encourage a vibrant and diverse sector and sustain high levels of public confidence. The Bill contributes to that through a streamlined system of law for charity organisation and regulation, a new and consistent approach to regulation of fundraising, and a clear definition of charity, with every organisation having to prove public benefit, all underpinned by an effective, modern regulator in the shape of the Charity Commission. I shall deal with the important contributions that have been made to the debate under those four headings.
	On the issue of administration and regulation, the Bill takes important steps, not only in the new charitable incorporated organisation, but the raising of the registration threshold from £1,000 to £5,000, the raising of the audit threshold and several other sensible measures. Hon. Members on both sides raised questions of administration and local examples of charities and how they organised themselves. I was especially struck by the contribution from the hon. Member for Rochford and Southend, East (James Duddridge), who talked about people with learning disabilities and their role as trustees. My understanding, and that of the Charity Commission, is that trustee bodies should be diverse and properly reflect the interests of beneficiaries. People with learning disabilities are absolutely able to be trustees of charities and there should be no difficulty for them in being so. If the hon. Gentleman wishes to write to me further on that, I would be happy to respond.
	The hon. Member for Sutton Coldfield, as well as making his generous offer to my right hon. Friend the Member for Darlington, raised several important points. He mentioned the status of armed forces charities and I hope that he is pleased that their charitable purpose is confirmed in the Bill. On the specific issue that he raised about the status of those charities, I have to say that it is hard in the circumstances to strike the right balance between the regulation that we need to achieve a level playing field, and the particular demands of certain charities. The position on armed forces charities is the same as for other excepted charities. They will need to fulfil the requirements made of them, but they are already subject to regulation by the Charity Commission. The only new requirement will be to register and even then only if they have an income of more than £100,000. We have said that that figure will not change before we complete the five-year review of the Bill.

Andrew Mitchell: The new Minister is doing very well, but he says that the issue is where to strike the balance. I hope that he will read the report of the debate in the cold light of day tomorrow and consider whether, in the particular case of armed forces charities, he has got that balance right.

Edward Miliband: I understand the hon. Gentleman's role in speaking eloquently for those charities, but if we make an exception for them, many others will say that we should make an exception for them, too. However, I shall consider the points that he raised.
	The second area in which the Bill makes progress is on charity fundraising. Several hon. Members raised that issue, and we see the difficulty in striking the right balance between regulation that is clear and commands public confidence and the avoidance of excessive bureaucracy. The hon. Member for Isle of Wight (Mr. Turner), who speaks for the Conservative party, was concerned that tin-rattling, as he put it, would still be allowed. The hon. Member for Cheltenham (Martin Horwood) defended the position of charity fundraisers, and indeed objected to the term chugging, which my right hon. Friend the Minister for the Cabinet Office used. My hon. Friend the Member for Brighton, Pavilion (David Lepper) who is not in his place— [Interruption.] He is but in a different place. He talked eloquently of concerns about the charity fundraising that takes place in Brighton.
	I shall set out for the House how the legislation will work. The current legislation represents a bad combination of bureaucracy and inconsistency. For example, before granting a licence, local authorities are asked to judge whether a charity's proposals for collections will yield enough in contributions compared with costs. That should be a matter not for local authorities but for charities. Everyone in the House knows that current legislation is implemented inconsistently and does not even apply to new types of fundraising. The Bill contains important steps forward in that area, and I shall briefly clarify the new regime.
	Collections in buildings such as churches, village halls, Royal British Legions and shops will not require a licence. Door-to-door collections will require a public collections certificate to prove the authenticity of the collector, and I can reassure my hon. Friend the Member for High Peak (Tom Levitt) that ID cards will continue to be part of that regime. Finally, street collecting will require a public collections certificate and a licence in advance from the local authority for collection on specific occasions.
	In answer to my hon. Friend the Member for Brighton, Pavilion, clause 60 sets out the terms on which local authorities will be able to regulate fundraising. There are a number of ways in which they will be able to do that. The key aspect is that they must make a judgment about whether a collection
	"would cause inconvenience to members of the public by reason of—
	(a) the day or the week or date on or in which,
	(b) the time at which,
	(c) the frequency with which"
	it takes place, and so on. I hope that that is of some reassurance to my hon. Friend.

Helen Goodman: I must apologise. I was misled about when the winding-up speeches would begin, which is why I should like my hon. Friend the Minister to consider this possibility: to prevent charities incurring a new and large administrative burden, will he consider wrapping up the collection certificate with the registration process?

Edward Miliband: There is a two-part process: the first will involve the Charity Commission and the public collection certificate, and the second will involve local authorities. It will be for the commission to determine how it works, but I hope, on the basis of my hon. Friend's intervention, that she will join us in Committee, where we can look forward to talking further about that issue.
	The third part of my remarks is about public benefit. Again, we saw the need to strike a balance. My right hon. Friends the Members for Darlington and for Cardiff, South and Penarth (Alun Michael), and my hon. Friends the Members for High Peak and for South Derbyshire (Mr. Todd) all spoke eloquently about that. A number of principles underlie the Government's approach, and it is important for the House and the wider charities' world to understand them.
	The first principle is that all institutions, including private schools, will have to show that they provide public benefit. I genuinely hope that that does not separate the Opposition and the Government. The hon. Member for Isle of Wight asked a series of questions about religion, poverty and education. In all those cases, it is right that public benefit must be shown, but I reassure him that, at least for religion, the obligation will not be onerous. We have accepted, and I think others have, too, that making provision for people to attend acts of worship is clearly a public benefit. It is clear in case law, and it will remain part of the charity law of this country. Religions have nothing to fear.
	The hon. Gentleman also raised the issue of poverty relief, and he challenged us on whether it was possible for a poverty relief trust not to be charitable. It is possible. For example, if we take the case of a trust to benefit a few people in one's immediate family, one might say that it was set up for the relief of poverty. However, there might be questions about whether it genuinely provided public benefit. That would be a question for the Charity Commission to consider, but even in that case, which looks deserving of charitable status, scrutiny would be right. The first principle, then, is that all institutions must show public benefit.
	In line with the view of the National Council for Voluntary Organisations and leading charities, the second principle is that the commission, not the Government, should make the final decisions about charitable status on a case-by-case basis. It will depend on the circumstances of fee-charging institutions.
	Our third principle, which relates to the remarks of my right hon. Friend the Member for Darlington, is that we do not believe that indirect benefit—the claim that, for example, private schools save the state money by educating pupils—is enough to justify charitable status. We agree with the Independent Schools Council, which said in its recent briefing to MPs:
	"Indirect benefit is not enough on its own to ensure charitable status."
	I hesitate to get into a discussion of Re:Resch with my hon. Friend the Member for Selby, because it might extend my speech far too much, but if he considers that case, he will see that indirect benefit is not the only point mentioned to justify the charitable status of independent schools. Lord Wilberforce, in his opinion, goes on to talk about benefits that can be construed only as direct. For example, he cites
	"the benefit to the standard of medical care in the general hospital which arises from the juxtaposition of the two institutions."
	Our fourth principle is that for private schools as a whole, we need to raise the bar with regard to the contribution that they make towards the public benefit, to the extent that it has a positive effect on the overall provision of education in this country. Some private schools are doing important work with the state sector, but many more must do so, too. That is why we will remove the presumption that education automatically confers charitable status.
	Specific amendments will be tabled later in the parliamentary process, but let me say one thing to the hon. Member for Cheltenham, the Liberal Democrat spokesman, on the Scottish system. As others have said, devolution is about different nations being able to introduce different provisions, and that is what the Scottish Parliament has done. In practice, both Bills will have similar implications in Scotland and England, and we are not convinced that it would be helpful to amend this Bill on the basis of a Scottish route. That is not simply our view; others agree. I recently had the pleasure of receiving a letter from Lord Phillips of Worth Matravers, who has been mentioned in this debate already. He said of the Scottish provision that
	"...it is not well drafted."
	Let me deal with the contribution of my right hon. Friend the Member for Darlington, who chaired the Joint Committee. The whole House owes him great thanks: the Bill is a better Bill for his work. I agree with the tenor of his remarks. Parliamentary scrutiny is designed to ensure that the Bill carries out our intentions on public benefit and we shall want to consider the proposals made by Members and listen to the debate in Committee.
	The hon. Member for South-West Devon (Mr. Streeter) asked about the process and timetable for the Charity Commission's consideration of each charity. When the Bill is established in law, the commission will hold consultations about high-level guidance on public benefit before finalising it. It will then consult on guidance relating to various subsections on fee-charging public institutions, including schools and hospitals, to establish how public benefit applies in those cases. The process will take between 12 to 18 months from the enactment of the legislation.
	Finally, I want to deal with the reforms to the Charity Commission—the first such modernisation since 1960. The House should be honest: this is a big challenge for the Charity Commission to rise to being a thoroughly modern regulator on the basis of new legislation. Many Members, including the hon. Member for Cheltenham, my hon. Friend the Member for Hove (Ms Barlow) and my right hon. Friend the Member for Cardiff, South and Penarth raised local issues about the performance of the Charity Commission.
	The basis of regulation has changed dramatically since 1960 and the Bill takes account of that in a number of reforms. Most important, it reflects the need for a widely representative board, whose membership will expand from five to nine under the Bill; for proportionate regulation, which the Charity Commission has a specific duty to ensure; and for quick and inexpensive means of redress if people are dissatisfied, which the Bill achieves through the provisions for the new charity tribunal. My hon. Friend the Member for Hove gave an important local example, and I hope that the new charity tribunal system will provide quicker redress in cases such as the one she raised. At present, people have to go to the High Court to seek redress from the Charity Commission, which is an expensive and difficult process, so it is no wonder that in the last decade on average less than one case a year has challenged the Charity Commission in the High Court.
	Other points were made about the Charity Commission. The hon. Member for Sutton Coldfield asked about independence. The Charity Commission carrying out its functions on behalf of the Crown does not compromise its independence. The Food Standards Agency is regulated in exactly the same way as a non-ministerial Department and since the Joint Committee proceedings we have added a provision of which the hon. Gentleman may not be aware. It states that
	"the Commission shall not be subject to the direction or control of any Minister of the Crown or other government department",
	precisely to provide reassurance on that point.
	The hon. Member for Isle of Wight raised accountability to Parliament. The Charity Commission must submit to Parliament a report on its work once a year. Labour Members are sympathetic to the notion that there needs to be rigorous Select Committee scrutiny of the work of the Charity Commission. The Home Affairs Committee has a lot on its plate.

Stephen Pound: My hon. Friend makes a cogent case that is actually persuading me to support the Government, but will he give some thought to the 1.5 million citizens of the United Kingdom who live in a part of the realm not covered by the Charity Commission? In Northern Ireland, there is no Charity Commission; the commissioners' writ does not run. I do not expect a response tonight, but will my hon. Friend look at the recent report of the Northern Ireland Affairs Committee, which drew the attention of the House to that anomaly? Will he include that report in the rest of his reading?

Edward Miliband: We are looking at the issue of Northern Ireland and I am grateful to my hon. Friend for his intervention.
	In the Standing Committee, we shall no doubt return to other points that were raised. It is important that the Bill is subject to proper scrutiny, as it will be. The Bill tackles long-standing and difficult issues in charity law, such as public benefit, face-to-face fundraising and the modernisation of the Charity Commission. It will help to nurture the dynamism and social conscience of the charitable sector. Four years after the initial report that led to proposals for the measure, it is on its last lap. The Bill deserves support from all sides and I commend it to the House.
	 Question put and agreed to.
	 Bill accordingly read a Second time.

CHARITIES BILL [ LORDS] PROGRAMME

Motion made, and Question put forthwith, pursuant to Standing Order No. 83A(6) (Programme motions),
	That the following provisions shall apply to the Charities Bill [ Lords]:
	 Committal
	1. The Bill shall be committed to a Standing Committee.
	 Proceedings in Standing Committee
	2. Proceedings in the Standing Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 13th July 2006.
	3. The Standing Committee shall have leave to sit twice on the first day on which it meets.
	 Consideration and Third Reading
	4. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
	5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
	6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.
	 Other proceedings
	7. Any other proceedings on the Bill (including any proceedings on consideration of any Message from the Lords) may be programmed.— [Mr. Michael Foster. ]
	 Question agreed to.

CHARITIES BILL [ LORDS] [MONEY]

Queen's recommendation having been signified——
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a) (Money resolutions and ways and means resolutions in connection with bills),
	That, for the purposes of any Act resulting from the Charities Bill [Lords] it is expedient to authorise-(1) the payment out of money provided by Parliament of-(a) expenditure incurred by the Charity Commission or a Minister of the Crown by virtue of the Act, and(b) any increase attributable to the Act in the sums payable out of money so provided under any other Act; and(2) any increase attributable to the Act in the sums charged on the Consolidated Fund for the purpose of making good to any person sums for which the official custodian for charities may be liable. —[Mr. Michael Foster.]
	 Question agreed to.

Mr. Deputy Speaker: For the convenience of the House, I shall take motions 4 to 10 together.

DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Defence

That the draft Army, Air Force and Naval Discipline Acts (Continuation) Order 2006, which was laid before this House on 27th April, be approved.
	That the draft Courts-Martial (Prosecution Appeals) Order 2006, which was laid before this House on 22nd May, be approved.

Contracting Out

That the draft Contracting Out (Functions Relating to Child Support) Order 2006, which was laid before this House on 22nd May, be approved.

Northern Ireland

That the draft Recovery of Health Services Charges (Northern Ireland) Order 2006, which was laid before this House on 24th May, be approved.
	That the draft Budget (No. 2) (Northern Ireland) Order 2006, which was laid before this House on 6th June, be approved.

Representation of the People

That the draft Representation of the People (Form of Canvass) (England and Wales) Regulations 2006, which were laid before this House on 25th May, be approved.
	That the draft Representation of the People (Form of Canvass) (Scotland) Regulations 2006, which were laid before this House on 7th June, be approved. —[Mr. Michael Foster.]
	 Question agreed to.

ENVIRONMENTAL AUDIT

Ordered,
	That Mr Elliot Morley be discharged from the Environmental Audit Committee and Ian Pearson be added.  ——[Mr. Heppell, on behalf of the Committee of Selection.]

PETITION

Post Offices

Philip Hollobone: I have great pleasure in presenting to the House the petition of Mrs. Joy Crofts and other customers of the Grafton Underwood sub-post office near Kettering in Northamptonshire.
	The petition of 66 signatures declares:
	That the petitioners believe that the post office network provides a vital service to local communities in both urban and rural areas which are threatened by the Government's withdrawal of services from local post offices.
	The Petitioners therefore request that the House of Commons call on the Government to reverse its announcement that it will end support for the Post Office Card Account in 2010 thereby threatening the viability of thousands of post offices and urge the Government to immediately halt its activities designed to kill the account off in advance of that date.
	And the Petitioners remain, etc.
	 To lie upon the Table.

PIRATE RADIO STATIONS

Motion made, and Question proposed, That this House do now adjourn. —[Mr. Michael Foster.]

James Brokenshire: I am grateful for this opportunity to highlight the serious and increasing problem of illegal radio broadcasting and the criminality associated with it. I choose those terms advisedly, as the description "pirate radio" does not convey a real sense of the activities undertaken by those involved.
	Many people retain a nostalgic view of the pirate radio broadcasters of the 1960s—the Radio Carolines of the era, which challenged the BBC with their line-up of cheesy disc jockeys, who are now part of radio history. Indeed, the Minister for Industry and the Regions recalled that era of broadcasting during a recent debate on the Draft Wireless Telegraphy (Pre-Consolidation Amendments) Order 2006. When she was asked by the hon. Member for Norwich, North (Dr. Gibson) whether Radio Caroline could be brought back, she replied:
	"None of us wants to divulge our age, but I assure my hon. Friend that Radio Caroline, like any other station, may apply for a licence and may even find it easier to do so once we have simplified and consolidated the legislation in the way that we intend."—[ Official Report, Fourth Standing Committee on Delegated Legislation, 17 May 2006; c. 4.]
	As the Minister's comments show, there is still a perception that pirate radio is a bit of harmless fun. I am not referring to the Minister in particular, but the traditional attitude towards illegal broadcasting is a significant part of the problem of tackling that serious issue. Of course, Radio Caroline was not illegal; it was just not regulated because it broadcast from offshore—my hon. Friend the Member for Lichfield (Michael Fabricant) nods in concurrence.
	The real world of pirate radio stations nowadays is very different from the romantic and nostalgic picture of the 1960s. The reality is that illegal stations do real harm to the communities they purport to serve. They are operated with wanton disregard for the health and safety of others and, in many cases, are highly profitable operations that feed other criminal activities. They cause significant disruption and damage to legitimate businesses that have paid significant sums to the Government in licence fees for radio frequencies that are in large part unusable. Many illegal stations are tied to the drugs trade and are used to promote events where drugs can be bought or sold. A report in the  The Times last November summarised the position well when it said:
	"There are more than 150 illegal stations across the country, a third of which are said to be run by criminal gangs who use them as a front to sell drugs. Previous raids have found drugs, guns and ammunition among the piles of CDs. Drug dealers within earshot of some stations keep tuned to wait for a particular song to be played or a phrase to be uttered, knowing that it is the signal that their next shipment is ready for collection."

Stephen Pound: I am grateful to the hon. Gentleman for the measured way in which he is contrasting the care-free days of Ronan O'Rahilly and the offshore stations, and the present reality. It is not just drugs and raves that are the problem with pirate radio stations in my part of the world. Typically a pirate radio station occupies a squatted council flat with steel doors. It is a living embodiment of contempt for the law. I am as a romantic as the next person and as affectionate for Radio Caroline and Radio London, but I entirely endorse the points that he is making and I wish him God speed, because this is a real problem. It is not about music; it is about menace.

James Brokenshire: I am grateful to the hon. Gentleman for that intervention. I will certainly come on to some of the issues that he has highlighted and will give some examples of the real misery and danger that is caused by a number of the operators, because that is a serious point. The links to crime are demonstrated by an example that Ofcom, the regulator, gave to me of a raid that was undertaken in the course of the past month. This is an example of what he was saying:
	"Two persons were found on the premises and were arrested for offences related to illegal broadcasting. Two knives and two samurai swords were found during the operation. A further arrest was made of a person wanted by the police for questioning as part of their operation trident investigations".
	Illegal broadcasting, by its very nature, is entirely unregulated. It feels no prohibition on playing music that glamorises gang violence and drug culture. It is accountable to no one for what it broadcasts. It abides by no programming codes on taste or decency and it operates without any regard for the consequences of what may be said on air.

Michael Fabricant: Is my hon. Friend also aware that, whereas in the old days people complained that somehow Radio Caroline would interfere with the radio for air traffic control, which 30 years ago was absolute nonsense, in this instance sloppy engineering by many of the pirate stations creates harmonics? In other words, they end up transmitting not only on the main frequency, but also, inadvertently, on other frequencies. That interferes with legal broadcasters such as BBC Radio 4, Radio 3 and commercial broadcasters, as well as with emergency transmissions used by the fire service, the ambulance service and, I understand, air traffic control.

James Brokenshire: My hon. Friend's point about the engineering that goes into the transmission equipment is right. The equipment poses dangers in the way he has alluded to. In addition, the way in which it is installed is highly dangerous for residents living in the high-rise blocks where such pieces of equipment can often be found. I will go on to illustrate in more detail some of the points that he has raised in his timely intervention. A recent example is germane to the wanton disregard for safety and the issue of the implications of what is said. It has been alleged that pirate radio was the trigger behind the Lozells riots in October 2005 because it incited racial tensions in Birmingham by spreading false rumours that a black woman had been raped by Asian men. That example shows the serious nature of the unregulated environment that pirate radio stations operate within.
	There are other ways in which pirate radio can cause harm in the manner that has been indicated in the interventions. Illegal broadcasting causes interference to safety-of-life radio networks, such as those used by air traffic control, the fire service, the ambulance service and the police. It is interesting to note that in 2005, Ofcom responded to 41 safety-of-life cases. One example was on 14 July 2005, when, following contact from the Civil Aviation Authority, the Ofcom investigation team were mobilised to east London to investigate serious interference with the ground-to-air communication system in use at London City airport. The source was traced to a pirate radio station in the Hackney area. The offending transmitter was subsequently removed by Ofcom staff. The problem was reported as being
	"the most serious case of interference for many years",
	because London City airport was about to close as it had no alternative means of reliable communication with the aircraft seeking to land at the airport. In the wake of that shocking incident, during a week long operation in London last October, 53 illegal broadcast transmitters were seized and 17 further transmitters and aerials were disabled—all in just seven days.
	There are also other health and safety implications. An illegal broadcaster will identify a slot in the FM broadcasting band. It will then locate its transmitter on high ground, usually on the roof of a local authority building, which will typically be a residential tower block. To feed the transmitter, the illegal broadcaster will tap into the building's power supply, often by diverting electricity from the lift motor room—in the process, putting the lift out of action for the residents. In some cases, illegal broadcasters will place their transmitters on mobile phone masts.
	Increasingly, illegal broadcasters are placing obstacles in Ofcom's path to thwart enforcement activities. Ofcom has told me that it has recently encountered: the placement of transmitters down ventilation flues, or chimneys, and on rooftops, with access to the device being restricted through the use of scissor-type car jacks; the attachment of live 240 V electric cables to the access doors on rooftops in an attempt to cause shock or injury; the utilisation of scaffold poles to jam main access doors on rooftops; the changing of locks on perimeter fencing and electrical cabinets; the attachment of barbed wire to structures around the transmission equipment; and, in some instances, the detachment of the main access ladders. The illegal broadcasters can cause significant damage to rooftops when installing apparatus. The pirates have also been known to intimidate the caretakers and their families in an attempt to gain access to high-rise blocks. As we have heard, the transmitters are crude in construction and are not electronically safe.
	All that can have a direct impact on the safety of people living in the blocks of flats that have been hijacked by the illegal broadcasters. One example given to me by Ofcom was of a woman living in a top floor flat who had to be evacuated following a carbon monoxide leak into her home. A crack had appeared in her kitchen wall following the installation of a transmitter that had been located in an adjacent gas ventilation flue. The incident was caused by an expanded car jack. Some £7,000 of damage was caused and the fumes from the flue were allowed to leak into her premises. I fear that it is only a matter of time before someone is seriously injured or killed as a result of illegal broadcasters' activities.
	There is a misconception that the people behind illegal radio stations are just enthusiasts with an interest in music and broadcasting. Some claim that they break the law because they want to serve a community need, but Ofcom provides an outlet for that through the new community radio licences that it is advertising. The licences are awarded regularly throughout the country to meet that unfulfilled need.

Michael Fabricant: In the past, regulators such as the radio division of the Independent Broadcasting Authority, the Radio Authority and Ofcom used to say that there was a lack of frequencies. However, owing to digital audio broadcasting multiplexing and the extension of the FM band from 104 to 108 MHz, frequencies are available, albeit with some limitations. As my hon. Friend said earlier, if Radio Caroline was to ask for a two or four-week local broadcast licence now, it would probably get one.

James Brokenshire: My hon. Friend makes a valid point about the use of the spectrum. Indeed, there are various ways in which communities can promote different types of music or reflect a community need, whether that is through restricted service licences for the time periods that he suggests, or the new community licences. I have had the privilege and pleasure of supporting my local community radio station: Link FM in Havering. I am pleased to report that it has now been given a full-time community radio licence. That demonstrates that if people wish to undertake legal broadcasting, there are the means and method to achieve that in a regulated environment.
	One of the most famous cases of a pirate going into a regulated environment was probably Kiss 100. The station had its roots in the pirate tradition, but was then able to broadcast music that had perhaps not been accessed before lawfully and with a licence on FM. The station is now very successful. Those who argue that pirate radio is about giving a voice to, or promoting music among, a wider community should be aware that the means exist to do that. Given the expansion of internet broadcasting, too, it is now even easier and more cost-effective to produce such output and reach a wide audience.
	The truth is that the majority of illegal broadcasters are motivated by money. The turnover of an illegal station can be significant. Set-up costs are minimal; a transmitter costs about £350 and a good-quality studio can be assembled for just £2,000. According to Ofcom, a large illegal radio station can generate up to £5,000 a week in cash, without the need to pay tax, licence fees or copyright charges for the music played. Such stations advertise parties, clubs, records and the like. A good number even have websites with discussion groups. The stations are full-blown black market businesses and the licensed broadcasting industry is bearing the direct economic cost of the illegal competition.
	It is interesting to note that many of the broadcasters and DJs who appear on pirate radio stations actually pay for the privilege. They are often teenagers and young people who may be impressionable. The pirates often prey on that and charge them as much as £20 an hour to broadcast on the stations.
	It is the mainstream stations that bear the brunt of the problem because their signals are scrambled and interfered with. It is interesting that Paul Brown, the outgoing chief executive of the Commercial Radio Companies Association, says:
	"Pirate radio operators steal music copyright, endanger the lives of airline passengers and those needing the help of emergency services, and interfere with the broadcast signals of legal radio services. In doing so, they rob BBC licence fee payers of services they have paid for and commercial and community radio listeners of services licensed to serve them. By reducing listening to legal advertiser funded radio services, they impair revenue generation and investment in content."
	Locally, the experience of Time FM 107.5, which serves the London boroughs of Havering, Barking and Dagenham—it covers my constituency and that of the Minister for Industry and the Regions—is a good example of the direct impact that illegal stations can have on the ground. As Neil Romain of London Media Company, which owns Time and several other stations, puts it:
	"They affect our business at its most fundamental level. They prevent us being heard by potential listeners. We have four pirates on an adjacent channel with poorly configured equipment which blocks our signal. We have clear evidence that advertisers who would use us do not do so because they are aware of the intermittent service. Barking and Dagenham council who have advertised with us in the past are currently not doing so because they cannot receive the station in their offices whilst the pirates are broadcasting."
	Another example is LBC 97.3 FM, in London, which is owned by Chrysalis Radio. Daniel Owen, head of regulatory affairs at Chrysalis, says the following:
	"Interference from pirate radio is ruining listening enjoyment for LBC listeners and having a potentially significant impact on LBC's business. One pirate station has been on-air on an adjacent channel to ours for many months and continues unabated, despite being a clearly well-organised determined outfit with its own website, promotional events and even phone-in number. The confiscation of pirate transmitters is of negligible value to LBC. Last time it happened, the offending station was back within hours on a new transmitter".
	Therein lies one of the problems. Ofcom has to mount a continual battle against illegal broadcasters, and it is not being given the back-up that it needs in terms of resources and the support of other agencies.
	Although there is the right to sentence such a person to two years' imprisonment, and an unlimited fine for unlawful broadcasts, even when Ofcom secures a conviction, offenders get little more than a slap on the wrist. There were 58 convictions last year, but the average fine was a paltry £563, with average costs awarded to Ofcom of just £452 per case.
	It has been suggested to me that illegal radio broadcasting offences are treated as little worse than not having a TV licence. Against that backdrop, it is hardly surprising that the Commercial Radio Companies Association has resorted to using its own funds to take out private injunctions—at a cost of several thousand pounds per case—against twice-convicted pirate broadcasters, in an attempt to reduce reoffending. But it is absurd that it should be forced into taking such action.
	Given that illegal broadcasters are making as much as £5,000 a week, such absurdly low fines can almost be viewed as a minor business cost—assuming that they ever get paid. Ofcom is currently dealing with £58,000-worth of unpaid court debts relating to illegal broadcasts; some of those debts are connected with cases that concluded many years ago. Illegal broadcasters are employing more elaborate methods of securing their equipment, and the result is that the cost of enforcement has increased significantly.
	The Government have not given this issue sufficient attention to date. The Minister's Department needs to make a more significant contribution in the battle to reduce the impact of illegal radio broadcasts, but only a co-ordinated approach will work. I understand that the possibility of a summit meeting is being discussed which would bring together all interested stakeholders—including broadcasters, the Government and law-enforcement bodies—to agree and implement a real solution to the pirate problem. Will the Minister commit to her officials attending such a meeting?
	In concluding, I have a few further questions for the Minister. Will the Government grant Ofcom additional powers, if they are needed, to make it more effective in dealing with pirates? For example, will they allow it to act more quickly to shut down telephone numbers known to be used by pirates? Indeed, will the Minister undertake to review the funding made available to Ofcom to enable it to pursue its enforcement activities? I understand that the licence fees paid by radio operators are merely a statutory fee for the grant of the licence. The money is not Ofcom's—it goes directly to the Treasury, and Ofcom's spectrum management and enforcement activities are funded by grant-in-aid, via the Department of Trade and Industry.
	If dealing with the increasing costs associated with enforcement gives rise to resource issues, that needs to be examined very carefully. If the Minister is unable to commit to providing additional resources, I hope that she will at least commit tonight to examining the funding for enforcement activities undertaken by Ofcom. In addition, will the Government encourage the police to make dealing with pirate radio a higher priority, and to work with Ofcom on devising enforcement solutions and increasing the arrest rate for pirate broadcasters? Will the Government review sentencing guidelines for pirate radio offences and encourage magistrates to impose stiffer penalties on convicted pirates? In many ways the problem is one of perception—the perception that pirate radio is harmless. I hope that my comments this evening have given the lie to that and highlighted the need to take this sort of criminality much more seriously.
	The co-operation of the BBC is also essential if any co-ordinated approach is to work. The BBC's attitude to pirate radio is, to a large extent, unknown. Will the Government commit themselves to including in the new BBC charter and agreement a duty to work with Ofcom and commercial radio broadcasters to discourage illegal radio broadcasting activity?
	Pirate radio is a serious problem in terms of crime, the dangers that it poses to public safety, and the significant business damage that it causes to legal and legitimate radio companies. It is not a case of "Smashie and Nicey"; more one of "Dangerous and Nasty". As policy makers, we need to tune into the debate on the steps needed to tackle this criminal activity. I hope that the Government will be on the right frequency.

Margaret Hodge: I congratulate the hon. Member for Hornchurch (James Brokenshire) on securing this debate. It is a pleasure to debate with him on something other than the Company Law Reform Bill, to which we will return with all energy tomorrow morning.
	I come to the debate as a radio addict, rather than an addict of other media. I have the radio on every moment I can—although not, I hasten to add, Mr. Deputy Speaker, on my mobile in the Chamber. The radio brings us massive benefits, including music and drama, news and information. We can follow our football or cricket team in action, or listen to entertainment such as quizzes, games and conversation. I know that the hon. Gentleman has been talking with LBC; he, I and my hon. Friend the Member for Ealing, North (Stephen Pound) have spent much time over the years in the LBC studios participating in creating radio broadcasts.
	I also congratulate the hon. Member for Lichfield (Michael Fabricant) on his contribution. He is better known to us all, and fondly remembered, as Mickey Fabb, as he was in his younger days.

Stephen Pound: The hair is the same.

Margaret Hodge: I am told that the hair is the same. The hon. Gentleman clearly has something to contribute to the debate.
	The hon. Member for Hornchurch spoke at length and I do not think that I disagreed with a word of his analysis of the problem. I admit to having been a Radio Caroline fan in the days before it was banned, by Harold Wilson, I believe.

Stephen Pound: Reluctant though I am to correct my right hon. Friend, the rascal was, in fact, the then Postmaster General, Anthony Wedgwood Benn.

Margaret Hodge: I stand properly corrected.
	Many of those who have now become household names learned their trade in the pirate radio industry and the ships that were anchored offshore in the 1960s, and some of today's stations, such as Kiss FM, that started and were nurtured in the pirate radio world now provide a high standard of entertainment. However, that is a partial view, and I accept what the hon. Member for Hornchurch said about it taking no account of the damage that pirate radio can do. It is important that we do not allow the ring of excitement about the term "pirate radio" to blind us to the importance of ensuring that use of the radio spectrum is effectively managed. In that, I disagree with the hon. Member for Lichfield. The spectrum is a limited and extremely valuable asset. One of the tasks for Government, and through that Ofcom, which has the job of ensuring that there is the best use of our spectrum, is to maximise the benefit to all our citizens from the allocation of spectrum throughout the media, so it is not that readily available.
	However innocent pirate radio may seem to the listener, it is not innocent. Misuse of the radio spectrum will cause interference to other legitimate radio users. It can have extremely serious consequences. Some illegal broadcasters claim that they break the law because they want to serve a community need. Ofcom enforcement officials believe that the majority of illegal broadcasts, as the hon. Member for Hornchurch said, are motivated by money. If it is possible to generate in excess of £5,000 a week in untaxed revenue that comes from a mixture of local advertising and charging young and often impressionable DJs to appear on the station, it is an ill-gotten business from which there are ill-gotten gains.
	The hon. Member for Hornchurch is right that owners of illegal radio stations have often been found to be part of wider criminal families. The joint Ofcom-police raids on stations have uncovered things such as drugs and weapons when they have closed down pirate stations. Those involved with this criminal activity have been known to threaten and intimidate neighbours and communities to obtain access to rooftops as transmission sites. Sometimes, they have even booby-trapped aerials by wiring to the mains electricity.
	As has been said, in the absence of regulation there is much harmful and offensive content in transmission. This can be broadcast through illegal broadcasters—pirate radio. This includes racist and offensive material that can be put on the air.
	I shall talk about Ofcom's role as the regulator. It is Ofcom that takes action. Funding is not necessarily the issue. Ofcom currently spends—the hon. Member for Hornchurch may not know—less than 1 per cent. of its current income on shutting down pirate radios. It may be that within its budget it will want to consider that issue. Even in my first few weeks in this ministerial role, I have to tell the hon. Gentleman that Ofcom has to deal with various abuses of information in the form of faxes, telephone calls and so on. A great deal of work is undertaken in tracking abuse within systems by illegal operators. Pirate radio stations have to be seen in the context of all the other regulatory activities in which Ofcom has to be engaged in tracking down abuse. I hope that the hon. Gentleman will appreciate that. I am not sure that money is particularly the problem.
	Pirate radio is much more of a problem in the UK than it is in the rest of Europe. Ofcom has estimated that there are more than 150 illegal broadcasters operating in the UK. We can listen to the radio at any time and find that there is often an interruption. At any one time there are probably about 60 illegal radio stations clogging up the radio spectrum.
	The main problem is concentrated around the London region and Birmingham. Ofcom responds to that appropriately and most of its resources are focused on those areas. It has established a separate investigative team to try to tackle some of the misuse of the spectrum by pirate radio stations. Eighteen out of the 21 staff in the investigative team are located in London and Birmingham.

James Brokenshire: I have been listening attentively to the right hon. Lady's points about resource and where people in Ofcom's enforcement department are allocated. There is a perception, at least in the commercial radio sector, that the issue is about funding and support in terms of the ability to ensure that enforcement is dealt with effectively and seriously. I heard what the Minister said, but I would be grateful if she made a commitment to examine the situation. Will her officials discuss funding problems with Ofcom, and determine whether other funding can be secured so that radio operators can be sure that their licence fees provide value for money?

Margaret Hodge: I do not think that I could persuade the Chancellor, other colleagues in the Treasury or anyone else that additional income from the licence fee should be spent on that function. I was trying to explain to the hon. Gentleman that only 0.8 per cent. of Ofcom's budget is spent on such activity, so a small increase in that percentage would have a minimal impact on the total budget. No doubt, Ofcom would argue that it requires more resources, as it has to carry out a great deal of policing in all activities. I heard what the hon. Gentleman said, but that is not necessarily the key issue.
	The hon. Gentleman said that very few people have been taken to court or, indeed, been subject to action. In one time period, Ofcom conducted 770 operations against illegal broadcasters. Most of that work consisted of seizing the transmitters, because by the time that Ofcom staff arrived at the premises, the broadcasters had gone. Only 58 of those 770 operations, therefore, resulted in prosecutions. We can argue about whether sentencing guidelines are appropriate—I shall look at the issue to see whether that is the case—but it is difficult to catch the criminals, because they have gone by the time that Ofcom and the police, with whom the regulator co-operates closely, arrive.
	In October 2005, Ofcom conducted Operation Crystal in London, in which 18 of its field operation staff worked with 32 Metropolitan police officers. Considerable resources were therefore devoted to that operation, in which 53 illegal broadcaster transmitters were seized and 17 transmitters and aerials disabled. Some 43 mobile and landline telephone numbers linked to illegal broadcasting operations were gathered for further investigation, which led to a 57 per cent. drop in the number of broadcasts that week. However, I do not think that anyone was arrested at all. Similarly, in Operation Clavicord, which ran in Birmingham between 30 November and 1 December 2005, 12 Ofcom field operation staff worked with seven West Midlands police officers. Three people were arrested, and 10 illegal broadcaster transmitters were removed. Six studios were raided, and equipment was seized. Efforts have therefore been made to tackle the problem, and they were recently strengthened when Ofcom restructured its field operation unit. Ofcom is looking at the bigger strategy, too, and it has opened discussions with King's College London on research to understand the motivation of individuals who choose to manage and operate illegal broadcasting stations. Interestingly, it is considering market research on the radio audience to determine the popularity of pirate radio.

Stephen Pound: I really do not want to appear unnecessarily curmudgeonly, but the thought of spending public or private money analysing why these people want to fill their boots with their ill-gotten gains, sell their drugs and present themselves as figures of importance in their local communities is just about the most total and utter waste of money that I have ever heard of. We have heard from the hon. Member for Hornchurch (James Brokenshire) why they are doing it. We do not need a university department to analyse it. What we want is people to kick down the doors and put them out of business.

Margaret Hodge: Ofcom would probably say that what we need to do is kick down the right doors, although when I read that part of my brief the same point did occur to me. Perhaps more important is to undertake research into why people listen to the pirate radio stations and use that intelligence to determine how to allocate spectrum in the future so that one takes away the market and hence the profitability of running a pirate radio station.
	The Government of course have a role to play in combating pirate radio, and officials in my Department have recently discussed pirate radio issues among other things with the Commercial Radio Companies Association, in particular in the context of how those illegal operations affected its members. That was followed up with a meeting with the regulators on 18 May 2006 where officials met Ofcom colleagues to go through the general issues around pirate radio as Ofcom sees them and to establish what they are doing on a long-term strategic basis to try to reduce the problem.
	If a summit is organised to consider these issues, it is appropriate that a Government official should be present, and if and when we receive details, I will ensure that somebody attends. This matter is a high priority, and I repeat that the policing of all these offences in relation to the communications industry is important to individuals who receive unwanted telephone calls or faxes. That creates more of a postbag for me and probably other hon. Members than perhaps the pirate radio issue, although I do understand the concern that that causes to the industry.

James Brokenshire: The CRCA is using its own resources to back up the enforcement activities through the courts. I hear what the Minister says, but if the CRCA is having to use its own money to obtain injunctions to add to the court process to make the enforcement stick, clearly there is an issue there.

Margaret Hodge: Clearly we need to keep the regulatory framework under constant review. I noted from the hon. Gentleman's contribution how the CRCA is perhaps more effective than Ofcom in tracking down the individuals concerned because the difficulty in the policing exercise is that it is easier to confiscate the equipment than it is to identify and charge the individuals. Again, if there is something that we need to learn from the CRCA activity we shall consider that.
	No one expects the romantic view of pirate radio to disappear overnight. The association of the '60s DJs and pirate radio is deep set in some of our minds. But by continuing to investigate, raid and prosecute where we can those involved, I hope that we will help to reduce what I agree is serious interference in radio and limit the problems associated with this criminal activity.
	I should like to reassure the House that there will be continued pressure from Government to close down any such illegal activity, and the independent regulator will continue to devote his time, money and energy to combating pirate radio stations. I congratulate the hon. Gentleman on initiating a debate on the issue.
	 Question put and agreed to.
	 Adjourned accordingly at nine minutes past Nine o'clock.